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Going Solo

Going Solo
By: Michael Hoban

Running a Successful One Person Shop

As anyone who has ever contemplated running their own one-person brokerage can tell you, the appeal is undeniable. There’s no one to answer to but yourself, so you can create your own schedule, choose what clients you want to work with, and best of all, you get to keep what you make. The flip side is the enormous responsibility and financial risk that comes with starting a new business, even for experienced commercial real estate brokers.


Jim Klein, SIOR,
Klein Commercial Real Estate


“Some of my friends at the big shops admire the independence and not having all of these corporate tentacles restraining you in what you can do, and they’re envious of those lack of restraints,” says Jim Klein, SIOR, who has been operating as a sole proprietor and president of LA-based Klein Commercial Real Estate for over 25 years. “But you really have to pick your place in the market. I’m lucky, I’ve got a long history behind me, but getting out there now…you really have to be selective and capable and have really incredible skills. I’m actually seeing more people going towards the big shops, maybe because of the support, recognition, and less personal frustration.”

Klein broke into the CRE business nearly forty years ago, learning the ropes at national firm Grubb & Ellis before opening Klein Commercial in 1995. Since that time, he has been largely on his own, with the exception of the occasional intern, some outsourcing to graphic artists, and a recently added part-time tech person. Klein says one of the most important ingredients in his success has been maintaining his focus, and for him that means working almost exclusively with industrial clients—and more specifically, corporate users, on both a local and national basis. He also believes that his location in the market has been a key factor. “Not working out of the house, getting an office with a storefront and with signage on a street with high visibility, near my customers, with a great delicatessen next door, that’s been very helpful for me,” says Klein. “My feeling is that if a real estate guy can’t find a great location, he’s in the wrong business.”

He is a true believer in the power of marketing, using some social media and sending out email blasts via Salesforce, but also snail-mailing old-fashioned, original artwork post cards that are surprisingly effective—as well as relatively inexpensive. He recommends consistent blogging/vlogging, with written posts heavy on graphics prominently displayed on his homepage that also go out in email blasts. But as is the case with all brokers, the best returns come through fostering and maintaining relationships. “I think that you build a relationship with customers by proving yourself over many years, and then at a certain point, those customers come to rely on you.” And the one area of relationships that has paid the greatest dividends is his relationship with fellow SIORs.

“I became an SIOR the first chance I could, and that has always been helpful in terms of getting leads,” says Klein, who estimates that he has missed only two conferences during his entire career. One of the many benefits he sees from his active involvement with SIOR has been through his hosting of roundtables at conferences. “It’s the social activities in the small groups at SIOR, the breakout sessions, where you get eight or 10 people at a table and you really get to meet people, and that’s where you build relationships and get referrals.”

Shad Phipps, SIOR,
Phipps Realty Advisors


Shad Phipps, SIOR, plied his trade at several CRE firms over a 20-year span before deciding to hang out his own shingle in November of 2020. Phipps is the CEO and principal broker of Columbus, Ohio-based Phipps Realty Advisors, a firm he founded along with President Scott Behrmann, with whom he had partnered in investment sales at the Columbus office of CBRE since 2009.

After serving six years in the military and graduating from college, Phipps began his career at a small family-owned firm in brokerage, worked on the development side for a couple of years, then returned to brokerage with CBRE. But then the pandemic hit, things shut down, and he began working virtually. “Six months of working from home kind of set the stage for the move,” says Phipps. “I hadn’t been in the office for a while and learned I could do a lot of things virtually. I got very comfortable with that, and so it wasn’t a great big transition to going out on our own.”

What made the transition easier was the availability of technology through third-party vendors. Phipps did careful cost-benefit analyses of the various tools (comp services in particular) using the metric of, “How much business do I have to do to justify that service? If it produces one deal, then it more than pays for itself. If it produces five, then that’s even better. But I think each shop’s needs are going to be different, depending on what you focus on and what your client’s expectations are.”

Phipps also did a lot of thinking about the branding for his newly formed company and solicited feedback from other CRE professionals. One camp insisted that it was a bad idea to use your own name in the event you want to sell the business down the road. “But the flip side of that is the branding,” says Phipps. “If you’ve been in the business and you have a reputation, people know who you are. So if you name the company anything other than something with your name in it, you have to brand it in a way that they can connect that name with you. And that involves a lot of time and energy and money, and I didn’t have to do that.”

Phipps says that not being afraid to ask colleagues or competitors for their opinion was extremely beneficial in getting his business launched, particularly when it came to procuring cyber and E&O (errors and omissions) insurance, which turned out to be more challenging than expected. “Make sure you shop around, get several quotes, and if you have good relationships with other small brokerage firms, ask them who they use and whether they like it or not.”

Like Klein, Phipps availed himself of what his professional associations have to offer.

Phipps is a dual designee with SIOR and CCIM, and was pleasantly surprised by the wealth of tools available. “It’s amazing what they have and what you have access to, and with the colleagues you have on that level…if you’ve got questions, ask. People are more than willing to help.”


Dan Drotos, SIOR,
Colliers International


Unlike Klein and Phipps, Dan Drotos, SIOR, began his career at a one-person operation, which landed him at a national brokerage when his Gainesville, Fla. firm was acquired by Colliers in 2019. After earning his master’s degree in real estate in 2012, Drotos teamed up with a seasoned commercial real estate broker running a solo brokerage. “He kind of had the market cornered for 25 years,” says Drotos. “He was a ‘pick up the phone and make something happen’ kind of guy…and throwing up a sign on a property and making a bunch of calls to his contacts was the extent of his technology use.”

Drotos acknowledges that his partner didn’t have the need to embrace technology at the time but recognized that the business was changing and “brought on young blood to keep the wheels going on what he had built.” He says that the adoption of technology—particularly electronic signatures and cloud-based file sharing—has had a huge impact on the leasing and sales process and that has really transformed the business. Technology has also allowed the big shops to enter tertiary markets like Gainesville, by either partnering with the boutique brokerages or acquiring them outright.

Since the acquisition, Drotos gets to operate as a boutique (although his office has added additional staff) but with all of the tools and data that a big firm like Colliers has to offer. “That was a real draw for me,” he says. “I realized I could get a load of resources and support from a publicly traded company, but I also get to have a lot of autonomy to operate how we always have—but with a whole lot more horsepower behind us."

“They judge you by your accomplishments, so as long as I keep accomplishing, I keep getting business.”

Whether the brokerage firm is a one-person shop or an international powerhouse, it still comes down to delivering results. As Klein reminds us, “They judge you by your accomplishments, so as long as I keep accomplishing, I keep getting business.”




CONTRIBUTING MEMBERS

Dan Drotos, SIOR

Jim Klein, SIOR

Shad Phipps, SIOR

 

Media Contact
Alexis Fermanis SIOR Director of Communications
Michael Hoban
Michael Hoban
michaelhoban@comcast.net

Michael Hoban is a Boston-based commercial real estate and construction writer and founder of Hoban Communications, which provides media advisory services to CRE and AEC firms. Contact him at michaelhoban@comcast.net