Courtney Haubach and Meghan Carrol joined Jessica LaRusso, director at Crexi, to talk about their experiences at Matthews™. The two gave insights and tips regarding commercial real estate and ways to manage the ever-changing market. The following interview dives into what it takes to be successful in commercial real estate, what newcomers should expect during the first year, and the most promising markets for investors.
Introducing Meghan and Courtney
Meghan Carrol specializes in single-tenant net leases for restaurants, specifically quick service and casual dining. Throughout the interview, she stresses the essentiality of having a drive-thru as a principal lifeline for the restaurant. Meghan states, “Everyone wants something with a drive-thru; it’s all about convenience.” Meghan also brings up the recent changes in the restaurant industry, including using conveyor belts and lockers outside for delivery pickup, used by Uber Eats, Doordash, Grub Hub, etc. She expresses her excitement for the future of quick-service restaurants and sees potential for her investors looking to buy into more quick-service properties.
Courtney Haubach, who specializes in single tenant net lease, specifically drugstores, compares these deals to bonds, stating that they do not operate like traditional real estate. In the interview, Courtney says, “For example, you buy the drugstore because you are buying the lease and who’s backing the lease, and it is going to act as a passive investment for you.” She states that many Walgreens and CVS properties have done a great job ensuring that customers who enter the store can also get real medical help. These companies have begun partnering with Health Hub and were a great commodity during the COVID-19 pandemic. Courtney also talks about the significant disconnect between buyers and sellers due to events that brokers cannot control. This disconnect is attributed to the Federal Reserve raising interest rates, causing buyers to want tomorrow’s pricing, whereas sellers wish for yesterday’s. The trend is visible across single tenant net lease, making brokers a vital aspect of the transaction since their job is to manage both sides. They are now working on their sellers’ expectations while simultaneously trying to attract a buyer to the deal. However, everything is temporary, and the market is expected to make a significant turnaround within the next two years.
How the Brokerage Business Works
The institutional side of brokerage is most brokers’ dream when they enter the real estate world. However, newer brokers in the business focus on private clients as they get their foot in the door. Meghan and Carrol primarily work mainly with private clients, allowing them to build genuine relationships, and ensuring their client’s needs are met. Meghan believes that “the biggest challenge right now is managing pricing expectations because you don’t want to bring a property to market on yesterday’s pricing. It’s all about managing their expectations.” Working in the real estate industry means brokers must market to buyers that present the most realistic offers and invest in something secure.
The interview discusses how buyer expectations have shifted and where they are currently placing capital. Meghan Carrol’s clientele for casual dining is focused on more secure properties that they will rely on for retirement. Her recent investors are excited to diversify their portfolios and get into properties with a drive-thru, even if they may lose a little bit of cash flow during this time in the market. At the same time, most of Courtney Haubach’s drugstore investors come from multifamily. These buyers come from an asset that appreciated over time, was quite management intensive, and was heavily regulated by the government. They are exchanging into a highly passive asset, while simultaneously increasing their cash flow. According to Meghan and Courtney, the states with the most real estate potential include Florida, Texas, California, and New York. Several buyers are expressing interest in properties in Orlando, Tampa, and Miami just because of the large number of people that moved to the state, and the attractive demographics. Due to the optimistic growth projections, drugstore owners are also looking into Nevada, Tennessee, Texas, and Florida. The two agreed that the corporations doing a great job navigating these changing market conditions include Chick-fil-A, Raising Cane’s, Tractor Supply, and Dollar General. These businesses are getting creative to drive consumers’ attention to their stores.
Major Misconceptions of Real Estate
While real estate is an exciting and promising market to make a career in, Courtney and Meghan both touch on the major misconceptions people have about the industry. Real estate is not a “get rich quick job,” and deals do not happen overnight. Courtney states, “I think many of those misconceptions are boiled down to the LinkedIn culture, and I’m guilty of it, to where we just celebrate our wins.” In reality, all brokers have losses and bad days, but they do not post about those. Social media rarely displays the hard work, determination, and grit behind the scenes of closing one deal. Newcomers must manage their expectations and understand that their success will not happen overnight. Real estate is an incredible job full of potential and upside, but brokers must be willing to make day-to-day sacrifices. According to Meghan, “you always have to think about what you’re working on now for a while and play later because you cannot do both right now.” Matthews™ offers a competitive, fun work environment where everyone pushes each other to succeed. Brokers are on a great team at Matthews™, full of people who all believe in the process.
There are not many female commercial real estate brokers in the industry. So, Meghan and Courtney are grateful to have the opportunity to work at Matthews™ and have people like Devon Dykstra to guide them through their journeys. Devon Dykstra is the Retail Director for Matthews™ Shopping Centers in the Western United States. Devon’s background and exposure to capital markets give her a unique perspective and understanding of institutional discipline and process. Devon is a market leader in retail transaction disposition and acquisition. She uses her years of experience in the private and institutional real estate markets to help her clients get the most out of their investments.
The best advice Meghan and Courtney can give to people breaking into the industry is to reach out to people who have already made way for themselves in commercial real estate. They say it is important to make connections, reach out to people on LinkedIn, ask questions, and be highly disciplined. Meghan and Courtney state they are more than happy to talk with newcomers and tell them about their experiences.
