The Austin Business Journal announced it’s Heavy Hitters list last week. Four SRS brokers were honored, including two SRS brokers in a tie for first place. Congratulations to Robert O’Farrell, Todd Wallace, Sean Murphy, and Austin McWilliams. Below is the interview conducted by The Austin Business Journal with the first place brokers, Robert O’Farrell and Todd Wallace.
Diversification driving SRS duo
Robert O’Farrell and Todd Wallace are senior vice presidents at SRS Real Estate Partners, both having joined the firm in 2004.
O’Farrell specializes in tenant representation, lease negotiations, site acquisition, project analyiss and disposition initiatives. Also experienced in project leasing, he has handled lease negotiations for more than 2.5 million square feet.
Wallace, in addition to advising national and regional retailers in real estate, heads the Austin-San Antonio office. He also is on the SRS Leadersihp Council and is a member of the SRS Executive Committee.
Collectively, their clients include Target, J.C. Penney Co., Toys R Us and Babies R Us, USAA, Bridgestone/Firestone, Verizon Wireless, FedEx Office, Family Christian Stores, Goodwill Industries, Academy Sports & Outdoors and CVS Caremark Corp.
Tell us about some of the bigger deals you handled in 2010.
- Sale of the former Target box in San Marcos, 102,504 square feet.
- Former Gilman Automotive dealership at I-35 and William Cannon Drive, 60,548 square feet.
- Negotiated a new deal for Toys R Us to add a new Toys R Us and expand Babies R Us, 55,000 square feet.
- Five Goodwill deals in Round Rock, Lakeway, Bastrop, Oak Hill and Southpark Meadows, 90,469 square feet total.
- Caliber Collision on Ben White Boulevard just west of I-35, 29,120 square feet.
You were able to put up some pretty impressive numbers this year. What’s the secret to your success?
Diversification. One of the biggest keys to our success is that we have a large tenant rep portfolio, so when a few of our tenants stop doing deals, we still have other clients that are active. We have also been fairly involved in the disposition business. Since the beginning of the recession, retailers have been looking for help with their downsizing needs. This has been a good source of business for SRS.
In general, how does Austin’s retail scene seem to be faring, post recession?
We are faring far better than most of the country. Texas in general and Central Texas specifically is one of the few shining stars.
What do you hear from shop owners?
Inflation is definitely taking its toll, be it gas prices, increased food and supply costs. It is definitely harder to make margins in this economy.
What’s the market like for landlords?
This market is still a tenants’ market. While there are some exceptions in key urban areas, the number of tenants that are active today as compared to the heyday is much smaller. National and regional tenants, specifically, are not willing to stretch to make deals in Austin. While they understand the vibrancy of the market, tenants have a limited number of deals to make and will make them where they can get the best deals.
Any advice for landlords?
Avoid the urge to look at the deals that were cut in 2006-07. They hold no bearing on today’s maketplace. The market is getting better, we’re not out of the woods yet.
In regard to tenants, what’s one of the biggest mistakes they can make in a market like this?
Due to the limited number of what I would consider “A” opportunities in the market today, we would urge tenants to not put off their pursuit to fill their new store piplines for the years ahead. Development has been virtually nonexistent in the retail sector, and development in the coming years will be user-driven – so virtually no spec retail. So if tenants want “A” opportunities, they must prepare well ahead of time in order to find the right opportunities in our market.
Which submarkets are getting most of your attention these days?
Central Austin will continue to be the tightest market and the most sought-after are of town due to strong demographics. Two of the most attractive submarkets continue to be North Central – Gateway/Arboretum/Domain; and Southwest Austin – Sunset Valley. Meanwhile, North Round Rock and Cedar Park seem to be on many retailers’ radars. Demographically speaking, the smaller the population density, the less desirable that area for retailers.
We’ve heard of big-box sites or anchor spots sitting vacant due to companies like Alberstons and Circuit CIty. Is this still a problem for Austin?
It is always a problem for any market when multiple retailers vacate a market or shut their doors. However, this also opens up opportunities for other retailers to enter trade areas they have been unsuccessful in penetrating. This was very apparent in Sunset Valley and the Arboretum trade area. Nordstrom Rack had been looking unseccesfully at both those trade areas for some time. When Linens ‘n Things and Circuit City closed, this gave Nordstrom Rack the opportunity to open a store in Sunset Valley and in the Arboretum trade area.
What’s the best advice you can offer to a broker who aspires to be a Heavy Hitter?
Never be afraid to get a no. You have to ask for the business or the deal. Unfortunately, this is a tough business and you are not going to win all the business or deals you are pursuing. It is simple math, the more deals you chase, the better success you will have in the long run.