More than three decades since the CRE Summit was first launched, organizers said the event, scheduled for Aug. 25 at CHI Health Center, is more relevant than ever. Event founder Jerry Slusky said current economic conditions and other market challenges rank with anything he’s seen over the past 30-plus years.
“We’ve had eight, nine years of blessed things going on in our lives, like 3-4% interest rates and low construction costs and we built the heck out of America and Omaha and Lincoln,” he said. “Then, all of a sudden, we get COVID, construction prices jumped up at least 20% and we get smacked with these interest rates.
“So where does this stand today? I’d put this one at a six/seven on a 10 scale of severity. This is up there with 1990, ’91, ’92 and we haven’t actually seen all the results yet.”
Slusky said the themes of the 2023 event – including charting the course of the future and building your own capital as a professional – reflect the realities of the local real estate market today.
“The content changes every year to fit the times,” he said. “Each of the subjects we’re tackling this year is a way to educate our CRE professionals, the whole group of them. It’s 900-1,000 people who are all professionals making a living in commercial real estate. They look forward to [CRE Summit] every year kind of like a barometer of where are we at and where are we going.”
Hitting the Sweet Spot
Chris Mensinger, senior vice president at Colliers, said the 2023 summit strikes the right balance by addressing the fundamentals of commercial real estate success through the lens of current market conditions. For example, money will never be unimportant to the process, which is why several presentations will look at ways to finance old and new projects.
“We’ve got a lot of talks that have to do with finance,” she said. “We’ve got a breakout session on creative finance techniques that some people can use in this environment that may help them build their equity stack. Then there’s a more traditional finance breakout as well.
“We’ve also got a construction project breakout session that talks about how to get things done with the supply chain and the worker shortages. When these were first being put together, we were talking about 3% interest rates and some of the supply chain things had caught up. But the cost of the construction and labor are now adding on to some of those costs, so getting a construction loan is much more complicated.”
Tailoring the Message
Mensinger said the topics are also addressed in such a way that professionals of various backgrounds and experiences can take home something useful.
“We’ve noticed in the last few years that the room has gotten not only younger by age, but also in years within the commercial real estate world,” she said. “So, we’ve got a couple of breakouts where they can pick and choose tables they sit at and sit with some really strong, experienced people in the commercial real estate market who can answer questions about how they are dealing with problems. These sessions are targeted towards people who are a little bit newer to the industry.”
Slusky noted that for as valuable as the presentations are, it is this type of collaboration that many attendees come back for year after year.
“To get a commercial real estate deal done, whether it’s a development or purchase of land or purchase of an existing building with business occupancy, there are many of these trades that get involved,” Slusky said. “From the companies that are doing the survey and the architects to the developers and the bankers, there’s so much collaboration and there’s so much time involved.
“With a market that’s changing, like the one that we’re in right now, it takes creativity and a lot of different minds to figure out how we get these things finished. Looking at some of the new developments in town, they’re complicated. For that reason, even though we compete with each other, I don’t feel competition that heavily in our industry. This is a team sport; it is really about moving things forward for our clients and getting things done that are good for our city.”
Leading From the Front
The changing times are also reflected in some of the topics addressing brand-building. These include how to create one’s path through success and failure, the elements of a sound professional reputation and issues surrounding environmental, social, and corporate governance (ESG).
“These issues have grown and become much more important,” Slusky said. “What used to be esoteric is not so esoteric anymore. There are lenders who won’t lend unless you’re following ESG guidelines. It is a big deal, and we feel like it’s important for us to identify those issues and incorporate them into the program.”
The conference closes with a look forward to Omaha’s commercial development future which, despite current challenges, appears to be very bright.
“In the near future, there will be a lot going on in the urban core with the developments that are happening along the riverfront,” Mensinger said. “I think housing is going to stay very, very big, especially with the interest rates the way they are. People aren’t going to be able to afford single-family housing, so there’s going to be some more multi-family developments and other opportunities that are going to be really strong.”
“Ten years ago, everyone said, ‘I don’t think I want to come out to Omaha or Lincoln or Kearney,’” Slusky said. “Now they’re flocking here and they’re flocking here because it is a very good part of the country. It’s growing, it’s steady, it’s trustworthy, it’s safe. I think we’re in for some very positive times.
“I think of Omaha as a big ship that’s been sailing very nicely. The seas have been a little rougher now, but boy, we’ve got a lot of momentum. Once these interest rates dissipate a little bit, we’re going to continue to cook. This is a very attractive market.”