Work Hard, Play Hard, and Give Back - A Real Estate Podcast
Join Michael Litzner, Broker/Owner of Coldwell Banker American Homes, as he delves into the dynamic world of real estate. In each episode, Michael interviews industry experts to uncover insights, strategies, and trends shaping the business. Whether you're a seasoned professional or just starting, this podcast offers valuable knowledge and inspiration. Tune in to learn from the best in the business and discover how to work hard, play hard, and give back in the ever-evolving real estate industry.
Work Hard, Play Hard, and Give Back - A Real Estate Podcast
S2E5 – The King of Commercial: Tony Briguglio on Investment Strategy, SBA Loans, and Market Trends
In our next episode, host Mike Litzner sits down with Tony Briguglio, Broker of Record for Coldwell Banker Commercial AMH, aka “The King of Commercial,” for an unfiltered look at the world of commercial real estate.
From navigating cap rates and SBA loans to spotting undervalued assets and closing deals with national tenants—Tony shares expert insights that every investor, agent, and entrepreneur should hear.
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Hi, welcome to the Work Hard, play Hard and Give Back a real estate podcast. I'm Mike Litzner, broker-owner of Cowell Banker American Homes, and we're here in the Franklin Square studio at American Homes and I'm happy to introduce the king of commercial King, the king of commercial, tony Berguglio. Thank you, co-world Bank of Commercial AMH. Welcome, tony, welcome to the show.
Speaker 2:Thank you, mike. It's great to be here. Franklin Square is a gorgeous office, by the way. Ah, thank you. Thank you, I love it.
Speaker 1:We've got a great staff here too, by the way. I love it. Before we jump into some questions, I just want to remind our audience if you like the episodes, you like what you're seeing here, remember to like, subscribe and stay around to the end, because we have the drop the mic question, which is always a lot of fun. Can't wait for that? There you go. Well, we'll wait until you hear the questions first. Don't jump ahead, tony. I'm ready for anything.
Speaker 2:Mike All right, there we go.
Speaker 1:All right, so let in, tony, let's go. So come on as lead broker of record Coa Bank Commercial.
Speaker 2:AMH, what first drew you to commercial real estate? The non-emotional aspect of buying property is very important to me. People aren't emotional about a brick building, a multifamily, a warehouse, industrial. They buy a hotel, motel. They just want to know that the property earns. Okay.
Speaker 1:Property earns they want to buy it. So what's the driver? What's really the driver in the purchase of any commercial property?
Speaker 2:The net operating income and the area Very important to a lot of people. But every buyer is different, right, every seller is different, so they all have their own niche of why they buy or why they sell.
Speaker 1:Okay, okay. So how much different is it like the investor side, as opposed to the owner, operator, user, end user, as you would say?
Speaker 2:The investor wants to get the property for as inexpensive as possible because the amount of money it has to do to build or build out Right the owner, the end user, doesn't care really much about the price as long as the net operating income falls within you, falls within a seven cap, or they can get their money back within 12 or 13 years.
Speaker 1:Okay, so let's just hit on something. There Again, a lot of our audience either they are licensed or in the periphery of real estate, but also we have a lot of open consumers, so to speak, of real estate. So you just touched on something called the cap you know cap rate. A lot of people seem to be confused what that actually means.
Speaker 2:Would you mind to expand upon that Of course the cap rate is the driving force of when you're going to get your money back on your investment. So cap rate goes by net operating income and area. So somewhere in California on a main strip, like where the Chinese theater is, would probably be a lower cap rate, which would be a higher selling price, than somewhere that would be in a depressed area like Wisconsin or Cleveland. Ohio would have a much higher cap rate, which would be 8%, 9%, 10%, 12%.
Speaker 1:So the prices would be much lower. But bring in a little bit more. Cap rate is short for capitalization right.
Speaker 2:Yeah, yes.
Speaker 1:So, really, it's relevant to the amount of return, relevant to the amount of money it costs to acquire.
Speaker 2:Yes, the net operating income generates the cap rate. Also, the area generates the cap rate. So if you're going to buy a property right in the middle of Manhattan, it's going to be a let's just call it a 2.5 to 3 cap. Okay, which is? Extremely high, yeah, if you're going to come out on Long Island. Long Island's going to be a 6.5 to 7.5 cap rate, which would be a much less expensive property.
Speaker 1:So, in other words, investors are expecting a higher rate of return to invest in certain markets, and certain robust markets have extra value, so to speak in there. Yes, of course, intrinsic value on the periphery that make it worthwhile making that investment Absolutely.
Speaker 2:Hotels and motels don't work on a cap rate. They work on 3.5 to 4.5 times the gross of the operation. Okay. So certain properties work on gross, like gas stations, right right. As long as the owner is running the business, it goes by gross, okay. If he's selling the business because he has a tenant, then it goes by cap rate, okay.
Speaker 1:Big difference. Interesting, yeah. So what advice would you give to an agent who's getting licensed and are trying to decide their path, their future? You know, obviously residential is a big part of what Cobo Mac, our American Homes, does. It's a huge part, I should say yeah, absolutely, but it's a very different lane In commercial.
Speaker 2:you'd have to dedicate a lot more time into your training aspect of it. You really have to learn how to speak to the people that have millions and millions and millions of dollars. I'm not saying residential people don't, but the average building that we sell is $2 million to $4 million on an average. So a person that's got four, five, six of those obviously has a good amount of money and they're typically spoke to in a different manner than a residential customer would be spoke to. So you have to be on their level. So they want to speak to someone that understands, because they'll know in four seconds if you don't know commercial real estate and they won't use you.
Speaker 1:Well, so let's jump in on. So, having been in sales my whole adult life, you know 41 years, so I find product knowledge, by the way, it's, you know, not enough agents take it seriously enough. But I don't care if you're selling houses or you're selling commercial product knowledge. I, you know what I find interesting. Of course and please tell me if I'm wrong on here, it's like there seems to be this approach or mindset for some, especially from the residential side, it's like commercial real estate and they, you know, it's like all one globular thing, as opposed to residential. It's just residential, with the commercial, has industrial, uh, retail, office space, there's property sales, there's leasing, you know, there's land, there's development right, highest, highest and best use as right of course we talk about yeah, so, um. So if you went back in time to give yourself advice, you know to, when you first joined real estate, now, in hindsight, what would you tell yourself?
Speaker 2:I would have concentrated more on understanding how the buyer and the seller would react to your presentation Because, again, product knowledge is everything. Right, you have to have the product knowledge on all those different assets that these people have the way they're buying or selling. So, yes, in the beginning we didn't worry about the product knowledge, we worried about just getting the listing any way we possibly can. Right, right, because we felt in the beginning, the more listings we had, the more we're gonna sell. That was definitely not true, right, right, you can't. It doesn't matter if I got 400 pounds of bologna, if I only sell 200 pounds of bologna, I'm gonna have a bad product sitting in the case.
Speaker 1:So, yeah, I don't have a lot of garbage, right, right cost.
Speaker 2:Increase your sanitation expense exactly so we've learned that getting the people who really, really, really wanted to sell their product or wanted to buy a product, we had to qualify them now. So we had to master our qualifications, so we had to put them through what we would call the master qualification situation means do you really want to sell your property? Is there any nieces and nephews, or brothers or sisters or kids that you want to leave it to? And once we realized that they really wanted to sell their product, then we were the right people for them and then we would definitely react a lot more to all right, let's get this sold. And we would research it and get it sold for them as fast as possible because they're in tune with you. They want to sell it them as fast as possible because they're in tune with you. They want to sell it right. It's people who think that their property is worth a lot more than it is. Yeah, we don't take on any longer because there's no reason for it.
Speaker 1:Well, you know it's. It's interesting as much as from my vantage point. Again, 41 years of doing this, yeah, commercial is very different. The power parallels of salesmanship is communication, yes, effective, effective communication, yes. And you know they always say like on the residential side, you know listing's the name of the game. You control the listing inventory. The buying public has to come to you and I always said that it's not all the listings, I don't need all the listings, I just need the sellable listings, right, you need the right ones, right, you need the right one Right. And it's being able to dig in to understand the seller's needs, motivation, wants and be able to communicate value. Now I want to touch on value a little bit because, interesting again, I cut my teeth originally on the residential side. Obviously, I bought and sold businesses and I own commercial property. So over the years I've learned a lot about commercial property and yet I own commercial property.
Speaker 2:So over the years I've learned a lot about commercial property and yet I'm deferring to you as the commercial expert and you know I've called you numerous times and picked your brain and you've been a great resource for me and someone who's got 41 years in the business who defers to me is I'm blessed to have you calling me up for stuff like that. It makes me feel really good about it.
Speaker 1:Well, it's mad respect, thank you. You feel really good about it. Well, it's mad respect, thank you. And I do understand the complexity of commercial, so much so that you surround yourself with people that are more knowledgeable than you in their respective fields. Yeah, you don't want to be the smartest guy in the room. No, that's a problem I get it, I get it, it's good, I get it.
Speaker 1:So over the years I've taken appraisal courses and one of the things I find really interesting in valuations which is a big part of real estate, you know when you're the expert, whether you're a residential or commercial, there's valuation. But on the residential side they're taught really only one approach and it's the comparable approach. You know many times right, people hear real estate agents or appraisers reference the word comps. And what is a comp? It's a comparable property that is sold. Now, if I understand correctly maybe you can expand upon this that's not necessarily the most common approach in valuations and commercial side, that's correct. So how do you typically start in valuing a property.
Speaker 2:Well again, net operating income definitely sets a value because the capitalization rate is based on the net operating income. So if I would say to you, mike, I have a property in Mastic or I have a property in Dix Hills or a property in Longwood, and one of the property makes three million dollars net operating income per year, do you really care where it's at, when the other ones?
Speaker 1:only make a million if they're all the same price now, exactly, absolutely one property doesn't matter where it is.
Speaker 2:if it's generating a lot of net operating income, that's going to be more desirable to an investor, yeah or an end-user. Either one they's going to be more desirable to an investor or an end user. Either one they're going to want it because they know they're going to get their money back fast. So the net operating income definitely generates a different kind of comp, because I have a lot of tools that I use to help me generate comps, and that's comps for what's sold in the area, based on the property size, based on the building size, based on where the property is. That is one way to look at it in the worst case scenario. But in commercial real estate they don't really care about comps. They care about what the property is generating, and that is 95% of why a person would buy a commercial property.
Speaker 1:Well, isn't it true too? It's like in the residential side. I'm looking at a house, let's say Franklin Square, since we're in Franklin.
Speaker 2:Square.
Speaker 1:I got a Cape Cod that I'm looking at. I want to value it, so I go back a year. There's maybe 50 Cape Cods that have sold within a reasonable radius of that property, right, and I can see. You know how many bedrooms, bathrooms does it have? A basement garage. You know similar property size and see what they sold. Now I get a 10,000 square foot office building. You know, right, it was how many 10,000 square foot office buildings sold within. You know a five mile radius of this building in Franklin Square, right, yeah, right, not many Right of this building in Franklin Square, right, yeah, right, not many Right. And if the nearest comp was, you know, 110,000 square feet, you know a residential agent wouldn't think about comping a. You know a three-bedroom, one-bath cape against a five-bedroom, three-and-a-half-bath colonial. There were different animals. And yet here we are trying to comp a 10,000-square-foot building against a 110,000 square foot building against 110,000 square foot building. So I think that plays into it to a certain extent as well. Of course.
Speaker 2:Right, of course. Yeah, because what is the rate of rentals? I mean, is it 90% rented? Is it 50% rented? You can have 110,000 square foot building that's only 22% rented, yeah, and have a 10,000 square foot that's 100% rented but yet has a long list of people that are waiting to get in because of where it's at and the desire of the building and the reputation of the building. And if that income is greater than the one that's 110,000 square feet, then obviously the 110,000 square feet's got a lot of dead space, so it's not going to get you your money back as quick as the 10,000 square foot. So you have to know these things in order to go forward, and the people that are buying and selling know that.
Speaker 1:You know if you hear what they agree on. Yeah, so I know you or I would probably pivot to you know a little bit to price per square foot, to use the difference of 10,000 versus 110,000. When appraisal comes in, let's just say they're not getting private financing in that building appraises. How much value does the appraiser put on the price per square foot? They put all of it on the price per square foot?
Speaker 1:Yeah, but what about the leases now? So now I know if I'm looking at that 110,000 square foot or the 10,000 square foot building, right, it's fully occupied. But I would look at those leases and say well, how you know who are my tenants here? Are they current on their rent? You know how many years out if, if, if the one lease is you know five years out, but they're three months behind, and then you know the two best payers are expiring in six months. What's my longevity of the of? The cash flow.
Speaker 2:So of course you know we recently looked at an office building that had it was 70% rented, but all 70% were coming up at the end of 2025.
Speaker 1:Wow, Is it one tenant or?
Speaker 2:just coincidentally. No, it was just the way he rented out. So all 70% of what's rented is coming up at the end of 2025. So virtually, an investor is not going to pay up for that property because he could be left with zero. Yeah, high risk. Yeah, it's too high risk for him to actually bite into it.
Speaker 2:So that particular gentleman wanted $11 million for his property and he's willing to go down to $7. We got him down to $7.5 in a matter of seconds. But then you go to the comp of the property, right. So that type of property in the area is going for about $5 or $6 million. So he's actually asking for a couple of million dollars over the actual comps of what the properties value in that city. So, knowing that you could possibly be vacant which is kind of good in a way, if you understand it because then there's something called a performer and there's upside Every investor wants to buy a property with upside. They don't want to be stuck. So some investors love that there's a 10-year lease left and some investors can't stand that there's a 10-year lease left. So you have to really feel out your client and qualify them, to understand what kind of buyer they are, to find them the right product.
Speaker 1:I would assume that it also depends on the momentum in the marketplace. You know, if the economy is expanding and there's demand for space, you know what's the likelihood I can fill a space and fill it at a higher price. I guess, right, if there's a higher upside on that, then you want the leases. But in the last few years, when you know, when the economy contracted a little bit, I don't know if I'd be, as… Nobody was paying their rent, yeah, yeah. So I guess that factors into it. Of course it does.
Speaker 1:Now, how much does the crazy roller coaster of interest rates the last few years… so let me frame it for our audience here. I'd say the last two years, we've seen something I know in 40 years I had never seen before. We not only saw the doubling of an interest rate, but the tripling of an interest rate in a short period of time, in six months or less, in other words, when the rate was bottom out around 2.5%, even though kind of like you know, I know people have gotten a little bit below, but maybe it's 15 years, it was, you know, depending. So the 30-year fixed rate. And then all of a sudden it jumped up to 5%, which is double, and then jumped up to 7.5%. So now you're triple the rate.
Speaker 1:Now the people that locked in with a fixed rate, which is more common in residential are set or in a great place, but from what I understand, what's the appetite for fixed rate versus adjustable rates in the commercial sector?
Speaker 2:Okay. So the battle between buyer and seller has been real strong for the past two years not including 2025, but 2024 and 2023, because when the rate went up, the sellers obviously wanted their price. And the buyers said, well, that's insane, I'm not going to pay full price if I have a big interest rate. And the sellers came back and said, well, in a couple of years you're just going to refinance and I'm going to lose the extra income I should be getting for my property. So the sellers were asking for the right number, but the buyers wanted a discount because the rate was high. Right. So because the rate was high, knowing you can, today, in 2025, sba loans are very, very popular and you can get a lot of money for very little interest rate comparable to a normal- interest rate.
Speaker 1:How much difference is?
Speaker 2:A couple of points, a couple, it is that much it depends on what your business generates and how good you are.
Speaker 1:Is it true, though, that you have to be owner-occupied? 51% to get an interest rate?
Speaker 2:Yeah, you have to be owner-occupied. You have to prove it, but that's easy to do, okay.
Speaker 1:Yeah. On paper or in reality.
Speaker 2:Both. I mean you have your office in there.
Speaker 1:Our audience is going to be seeing this. It's going out to the public. Yes, no, you have to.
Speaker 2:Listen, you can't fool the program. So they understand, they know what's going on. Okay, they're willing to lend money if the company that's getting the loan is very reputable and they have a really good background. They're not just giving it to the guy who decides he wants to open up a deli and you know, right, right, it's not happening. Correct? You have to have a good background, you have to prove yourself.
Speaker 1:Yeah, now I had heard that the SBA loans Definitely a little bit more complicated paperwork-wise. Yes, and it'd take a lot longer to get approved. Is there a noticeable difference? What do you see on your side?
Speaker 2:Yeah, it definitely takes a little bit longer to go through the motions, because they're doing their due diligence on you and your company. Okay, I mean, they're checking you, they're checking into your business, they're checking into your EIN numbers, they're making sure that there's no shenanigans happening. So again, a reputable company is going to get the SBA loan with really no issues. But if you're sketching in any kind of way, shape or form and they figure out that you're trying to just fudge numbers because everybody tries to fudge numbers, it's just the way of the world, I don't know.
Speaker 1:It's like trying to value the Mar-a-Lago. I don't know if I want to fudge numbers in New York.
Speaker 2:We don't want to fudge numbers, but there are some companies out there that just try to do what they got to do to get a loan. I mean, we've seen it so many times where they put in an offer, sba, and then when the due diligence is up they still don't have an approval because they just, yeah, we know they're not going to get it.
Speaker 1:Yeah, be the time frame. You would expect 45 days. It is 60 days, 60, yeah, okay, so compare that to conventional financing 15 days.
Speaker 2:25 days, okay, yeah, because it's more streamlined. There's not much investigation going on. They run your credit. They see your bank account, they see that you have the money putting down. Is it is required 20, 30 or whatever. It is 3% on an FHA.
Speaker 1:Yeah, conventional. What are they expecting? Traditional down payments 20%, typically.
Speaker 2:It's just normal.
Speaker 1:Okay, how often are they demanding?
Speaker 2:25% or 30%, depending on how the bank comes back with a value Okay, and the bank uses their own appraisers, so they come back with their own way of evaluating the property and you can beat that.
Speaker 1:You can overcome it by coming up with another appraiser or a different appraisal that sees it differently. They have to be approved by that bank though.
Speaker 2:Yeah, the bank would dispatch out a different appraisal company. Okay, so two appraisals on a complicated property is not abnormal.
Speaker 1:Okay, sba, now the SBA allows for a much higher loan to value. Is that correct? Sba Now, the SBA allows for a much higher loan-to-value. Is that correct? Yes, so what's the max value? Ltv.
Speaker 2:It would probably give you 80% or 85%, depending on. Can you get 90 on?
Speaker 1:SBA or not, you can get 90.
Speaker 2:You can, but 80-85 is like where they're very comfortable Right. 90 is more complicated to where they have to do more investigating.
Speaker 1:All right, so it starts to get a little dicey, but it's possible up the name. Oh yeah, absolutely Okay. Oh yeah, definitely, All right. Good, that's a good framework.
Speaker 2:That's why SBA is so popular.
Speaker 1:Yeah Well, lower rates and higher LTVs.
Speaker 2:Higher LTVs, yeah.
Speaker 1:Yeah, awesome. So the commercial market has seen a lot. So right now for investors, you know, and business owners, what should they be paying attention to?
Speaker 2:It depends on the asset that they're used to buying. A lot of investors like to buy land and build. You know, believe it or not, if they invested in shopping centers right now, we're on fire. Right, because national tenants pay even when they move out. Right, so you can't get a national tenant without a shopping center. I mean you can have a standalone building, a Burger King, a McDonald's, whatever Taco Bell, but shopping centers are probably the best investment you can make. If you have something that's going to be in the 10-plus units in a shopping center, okay, because you can put more national tenants in there, so your income is guaranteed to somebody who's going to want to buy it in the center. Okay, because you can put more national tenants in there, so your income is guaranteed to somebody who's going to want to buy it in the future. Yes, which?
Speaker 1:is real nice. Yeah Well, I guess when you have a publicly traded company, you know that's, you know it's the way to go. It's technically worth, you know, a billion dollar plus. Yeah, it's safe to say your rent is a little bit more secure, sure.
Speaker 2:We've sold many Dollar Generals that have been out of business for two, three years and Dollar Generals are still paying rent Really.
Speaker 1:Yeah, that's publicly traded Dollar General, yeah. Yeah, I don't shop there, so I don't know much.
Speaker 2:Well, there's not many in New York. Okay, there's a lot out of New York, but we do sell in the 50 states, so it but we do sell in the 50 states, so it's not that uncommon for us to come across at Dollar General. So then the seller has to say I'm getting a guaranteed income from Dollar General Once I sell it. I don't have that income stream anymore. The new owner will take over and Dollar General will give them a buyout. That's typically how it works. Dollar General says okay, I owe for the next four years. I owe $260,000. I'll give you 100 000 you can put toward the purchase, get us out of our lease, and then we go forward. So right. And they guarantee, just like a lot of national companies. It's triple ends. You don't have to worry about property, you don't have to worry about fixing trees, you don't have to worry about the electric going out, you just collect your check, right, right.
Speaker 1:So triple n shopping centers, stand-alone big business If someone was looking for shopping centers right now. Have any good properties right now? Yes, yeah, we have quite a few. Here's your chance for a pitch.
Speaker 2:We have quite a few shopping centers for sale right now, especially in Florida. In Florida, we're currently putting together a $65 million shop, two shopping centers that can potentially go up another four stories. So it makes the value so much more and that's where we came up with the $65 million valuation. So we have those shopping centers that are in the workings right now. We have a shopping center in Westbury that's approved for 7,000 square feet, nine units, 800 square feet per unit, okay, and that will bring you $250,000 a year in net operating income. Okay, so the value of that property is around $4 million Once complete, when it's complete, and the owner's only selling it for $2.1 million.
Speaker 2:So there's a lot of upside on that property. Right, it for $2.1 million. So there's a lot of upside on that property. And it would only cost you $225 per square foot to build that 7,000 square foot building. So, all in, you're at $3,500. The property is going to be worth $4,100,000 and you're only paying $3,500 for it. So you got a $500,000 leeway there and your property will be paid off in 13 years 12, 13 years. So that that's a great property to have also, yeah, so, yeah, shopping centers are the way to go and gas stations phenomenal.
Speaker 1:Okay, phenomenal Now okay, since you brought up gas stations. Yes, all right, I have a little bit of background, since my dad owned a gas station. Love it Over the years and stuff like that. What should an investor or even an agent be concerned about? Environmental? What's a typical process in an environmental one?
Speaker 2:Depends on the tanks in the ground. Yeah, we sold a gas station in Wisconsin. We were ready to close. They did a phase one. They found a little bit of garbage in the ground and they did phase two. The guy never had an environmental problem, never had tanks leaking, but he did store. He rented out part of his lot to trucks. Okay, those trucks leaked oil, went into the ground over 20 years and, boom, you have an environmental problem. So it held up the closing for a year and a half. Wow, okay, Because they have to get to the source right, they have to remediate. Yeah, of course, If your tanks are 20, 25 years old and you don't do an environmental every year, you're going to run into problems. So the environmental is very important to understand how many tanks are in there. Are they single line, double line? Are they metal? Are they fiberglass? When was the last time we changed? Checking the lines from the tanks to the pumps is very important. Some people have brand new tanks but they have 25-year-old pumps that look like R2-D2.
Speaker 2:I don't even understand it, but they really do and you know they just put money into their properties. If it's a big company like Bola, or you know it's a Mobil or it's an Exxon or it's a good company they'll make sure that everything's done the right way. But if it's a good company, they'll make sure that everything's done the right way. But if it's a mom and pop in Illinois. You can have a little bit of a problem with it For our audience here.
Speaker 1:What's the difference between a phase one environmental and a phase two A?
Speaker 2:phase one is just pretty much take a spoon, stick it in the ground, check that, send it out and check it. A phase two is they have to drill. They have to drill holes and take big samples.
Speaker 2:Boring samples, as they call it right. Yes, you have to. All right, I would have to tell you that six out of ten gas stations that get sold get converted to a fast food chain or a coffee shop. So that's where the environment becomes the most important, because you can't serve food on a place that's environmentally an issue what's going on in the banking industry?
Speaker 1:It seems like for a number of years there was a lot of banks expanding. There were so many banks. And now, with the advent of online banking, what do you see in that sector? There are so many banks for sale right now.
Speaker 2:So many, so many. So what's great about the banks being sold is the dispensary business is taking over those banks because the vaults are temperature controlled. Okay, so they don't have to install anything that has to be temperature controlled, because all the volts are temperature controlled, which is great Okay.
Speaker 1:So they're actually using.
Speaker 2:Yeah, so they're looking for them, but we have to wait until New York or, you know, florida or California wake up a little bit more to the dispensary, because they're only allocating a certain amount per year. And you know, there's a lot more people that have licenses to sell but just can't find a place. Yeah, the location, yeah, and the banks are holding on to it. They want to sell their property for a lot, yeah, which is good, because they know there's a need for it.
Speaker 1:So let me pivot a little bit here. What's? One piece of advice that you think is completely overrated, like buy low, sell high. You know, you hear these, you know little cliche things. What's a piece of advice as it pertains to commercial real estate?
Speaker 2:Well, the major thing that's overrated is not taking it serious enough. You know, people just come in and they're like oh, I could sell commercial property and work two days a week.
Speaker 2:And you know it's not that type of job, it's not the type of career I mean. I don't see it as a job because I love every second that I'm in it. I love what I'm doing right now, this second with you. I love when I'm going to leave here and go look at a property. I love talking to people on the phone about their properties. The knowledge that you can get just by having conversations is immense, because it just doesn't stop. So taking it so nonchalantly is Okay.
Speaker 1:Now, do you take part-time people on or not? Because in residential you see a lot of people get one foot in the business, one foot out. Sometimes they cross over Right, and you know it's a business. I would say it's a business opportunity. Yes, you know, an agent decides to sell real estate. It's an opportunity to be in business for themselves, not necessarily by themselves, but it's not uncommon for people to come in part-time and be somewhat effective. I mean again, what's part-time? I see it twice a month for two hours. That's not really part-time, but 20 hours a week consistently would be… I don't have any part-time but 20 hours a week consistently would be.
Speaker 2:I don't, I don't have any part-time agents.
Speaker 1:20 hours a week how many agents are on the Coldwell Banker commercial? I'm our AMH team right now.
Speaker 2:Well, right now we have ten full-time, all right. People that come into the office and train phone call, right, train phone call, train phone, it's all the. But they understand what the concept is of why they either left residential, came to the commercial side or just started out in commercial, because that's what they really want to do. They want to take a big bite instead of a little bite.
Speaker 1:Yeah, yeah.
Speaker 2:If I can't train you, if you wanted to work part-time and I couldn't train you, and really you're not going to have the knowledge to go out there by yourself. You're just not.
Speaker 1:You're just not so many different nuances in the properties as we already alluded to in this conversation already.
Speaker 2:We do have people that are part of our team that do nothing but send us pictures of for sale by owner on commercial properties. That's all you drive around all day, yeah, and they can earn just by giving us those leads and we can turn those leads into sales, so there are people that do that. I mean we're not going to turn away anybody that wants to give us a free lead. I mean I'd have to be crazy to do that.
Speaker 2:So, we have people that just say, hey, I see a lot of for sales and I'm just going to drive around all day. That's what I want to do while I'm taking care of my family. We're okay, we're fine with that. Yeah, no problem with that, but we're not going to teach you the commercial business.
Speaker 1:Yeah, that's that's. You know it's the different uh thing to be. You know spotting signs and sharing information as opposed to actually evaluating professionally.
Speaker 2:You know commercial properties and negotiating transactions, right if you wanted to give me 20 hours of your time every week, I'll give you 40 hours of knowledge in those 20 hours to escalate you. But you have to obviously understand you have to be a salesperson in at least 80% of what you're doing and then I'll teach you the other 20% knowledge. Right, it's very important.
Speaker 1:If you don't have that flair, you're not going to make it, and it's the consistency also right. I'm sure it's the same. That's a parallel, I'm sure on both sides. Yes, if you're going to give me 20 hours, it's not just 20 hours this week, you have to be there every week, correct?
Speaker 2:Yeah, it's very important because once you give 20 hours and 20 hours and then you stop, I'm just going to obviously not fulfill my end. Because you're not fulfilling your end, right, right, you're not going to be as important as you should be because you made a deal with me. I'll give you 20 hours if you give me 40 hours, and that's just how I roll. Right, right, right. If you came in 20 hours and I only gave you 10 hours of value, then you're going to be upset that I didn't keep my end of the bargain. So I always keep my end of the bargain because I know that that person can generate income for the company, right, as well as making them another asset that the company has which is great.
Speaker 1:We could never be more committed to an agent's success than they are Right, correct, right. So I can have the best training in the world. If you're going to show up and not apply it right, the the biggest misnomer is like is the training really good? The training can be great, but if you're not going to do anything with it, the money with the rubber hits the road. Right is the application. What did you learn? What are we going to be doing with it? Right, correct, so?
Speaker 2:so that comes with the commitment on the other side it's like you know, uh, for for the first 15 or 20 years of my life, I was very into Okinawa butchitsu, which is a form of karate, right, okay? So when I first started, there was 100 people in the class. Yeah, guess what happened 15 years later, there was not one of those 100 people left, but me. You know what I mean, what you kill them all with your karate chops or what Pretty much, pretty much.
Speaker 2:It's just that I was very committed. Survival of the fittest yeah, of course I was very fit back then too, but the commitment that I had to the craft made me the only person left, and that commitment is no different in real estate. You have to. If you're going to commit to it, then commit to it and let's go forward. And everybody that I hire I always say is you know, hopefully you know. You're not going to be told this is the wrong decision. You shouldn't be doing it, because there's not going to be a lot of people in your corner when you ditch a normal nine to five and try to become an entrepreneur. It's one of those things that you have to have support. But I can guarantee you, when you come into work every day, all 10 of us are going to support you to get better and better and better, because we're all in there to do the same exact thing is earn and learn, and that's just the environment that we keep and it's pretty exciting. Yeah, come to the office anytime, you'll be very, very excited.
Speaker 1:so um, tell us about. You know, um, there's a fairly recent decision maybe six, six months, maybe a little bit longer right to take Coldwell Bank of Commercial AMH out of multiple listing right. So for an agent on the residential side who has access to the residential MLS which I think is kind of a little bit of a misnomer because they have a commercial section, they do, but it's really a residential MLS, so why would a commercial broker not be part of that? Why don't you share your thoughts on that?
Speaker 2:Because in my experience since I started in commercial, most investors, buyers and sellers are not going to put a $3, $4 million property on an MLS site. It's just not something that a seller or investor or buyer is going to go to look for a property. Right, we now have designated sites and we had designated sites back then. Right, but that's where you go to buy property. You go to a commercial site to buy commercial property. You don't go to a residential site to buy commercial property. You just don't. So we understood that and we said, okay, so we don't need to have our agents paying these MLS fees when we're never going to use MLS. The only thing I can tell you about MLS is that if you go there and look at how many commercial properties are dead on there, it's immense, immense amount of property. Right, because you have your real estate license, you can sell residential or commercial Right.
Speaker 1:So for an audience that's not licensed, just so they're clear on this, the real estate license that's required in New York State is the same for residential or commercial. Correct, it's really the discipline.
Speaker 2:Yeah, you have to understand it, you have to know what you have to train for it. Yeah, unfortunately, every person that we talk to about coming over commercial, who are maybe at a commercial um you know place, never got any training. They just say go buy your own cards, go your own leads, and if you have a question let me know, and most of them fail. We don't work that way. We train every single solitary day. You come into the office, we're training.
Speaker 1:Okay, so, tony, real quickly. So you know, we came to this conclusion that we really should have a separate licensed commercial organization and it's licensed. Well, certainly we have the value and support of co-wall banker, um, and their franchise because they realize, yeah, they realize that commercial is a separate animal. So co-wall banker residential, co-wall banker commercial are two separate franchises. So we, you know, they offered us that and we took it outside and licensed it single and separate than residential offices, and many of the residential agents come across commercial leads. So are you of the mindset that a residential agent is actually better off referring the commercial business over than trying to attempt to do it themselves?
Speaker 2:Yeah, absolutely trying to attempt to do it themselves. Yeah, absolutely. I mean, if you're a I like to give examples. If you're a person that just bakes cake for a living, why would you take on an ice cream shop if you don't know anything about it? Right? If you're a residential agent and you come across a commercial listing, just give us the referral and let us take care of it for you. All you have to do is hand it over to us and not worry about it. We'll be in contact with you constantly to let you know what's happening with the referral. Some come through and some don't.
Speaker 1:It just depends. You know what's interesting. I think agents don't like to turn away business, obviously because it's business, but at the same time, the easiest business is to get his referral business and yes, right. So, and how do you build your referral business? Here's a simple hint do a good, freaking job, right. So you do a really good job and you've been a successful residential agent. And then you get a lead in commercial and you really don't have the experience of discipline or understanding of it. When you mishandle that, you just burn that referral lead out. And now here's someone who could have referred you three more residential deals and now they don't trust you. So I think it's extremely empowering to an agent when they can look at the person and say, hey, look, I really appreciate your referral business, but I'm not the best person for this because it's an added discipline. Yes, this is my specialty and I'm going to want to hand this off to somebody else who's going to give you a better experience and that goes back to the first thing you said.
Speaker 2:That's doing a great job for your client?
Speaker 1:Yes, it's putting them in the right hands, and then those people appreciate that you're stepping away, them in the right hands. And then those people appreciate that you're stepping away and they know it's business too Right, so that you put their needs in front of your own, so to speak.
Speaker 2:What I'd like to say to the residential agents really quick is that you may sell 20 houses a year, right, and some of your let's just say 30% of your houses that sell they own a business or a piece of property other than residential Right. But we put hundreds of listings up every year, right, and I guarantee you every one of my clients has a house Right. So the referral business goes both ways. Yes, it does. I'm a professional commercial guy. I do nothing with residential. I know how it works. I'm not really into residential. So I would refer out all my residential business, correct? I may get three from you, you may get seven or eight from me. So it's going to go back and forth, correct? I'm not going to put myself in a position to not help my client the best I can, and referring it out is the best thing I can do for my client.
Speaker 1:Perfect. It's a good philosophy. It's really fundamental If you always put the client first, the rest of the stuff takes care of itself. It does, yeah, it does. So. In this podcast, we always like to maybe pivot a little bit to the play side, the personal side, so I want to take this to the next section. Before I do, I just want to remind our audience if you like the episode, if you like the podcast going on, please remember to like and subscribe. Okay, love that. So Tony, commercial real estate deals. I mean, obviously they're intense. You know the bigger numbers, um, you know so, um, a lot more detail in them. But when you're not working, how does Tony actually unwind?
Speaker 2:well, I'm a very big family man, so I love spending time with my family. There's nothing more that I want to do in life at my age than spend time with my family and my grandkids. I just love it.
Speaker 1:How many kids do you have now?
Speaker 2:I have four boys and a girl and a boy. Grandson and granddaughter Love it, love it. There's nothing better than that. So as much time as I can spend with them, I do. But I love tennis, I love racquetball. I'm okay to pick a ball it's a little too different for me and I love to shoot pool. So anytime I can get that in, I will.
Speaker 1:All right, I'm just going to make sure I hold on to my wallet when I get near that pool table. I have a feeling we have a shark in the room. Hold your wallet when you're playing racquetball to my friend. Oh, you can do that too. Yes, yes, all right. All right, cool, all right. What so? What's one fun fact about tony that people might not expect?
Speaker 2:I'm just really into. Whatever my younger children are into, yeah, whether it's playing video games with them or, you know, going out and shooting basketball, whatever, whatever they like, I take a very big interest into it because it's important. When was the last time you saw a 63-year-old guy playing Rubik's Cube? My son's into it, so I want to be into it. I like to support them in what they love to do, to excel them. If they're going to take an interest in something, I try to let them make sure that the interest is going to go to the point where they're going to take an interest in something. I try to let them make sure that the interest is going to go to the point where they're going to be famous. You know I'm crazy like that, but I support in everything they do and that's really cool to me. Yeah, that's really cool.
Speaker 1:That's cool to me too. Yeah, no, it really is I like that I really do so you know charity and giving back is a big part of you know, and CBC AMH as we call it right, yes, are there any causes or initiatives that you're really passionate about?
Speaker 2:I'm a cancer survivor so I do everything I can for the cancer cause. Yeah, there was a time in my life where I would play Santa for a week for cancer kids and stuff like that. As fulfilling as it was, it was very sad. That was very, very important to me. The heart of American Homes very, very important to me and uh, uh, the heart of american homes is very important to me too, because it's going to help people that are really in need. And, yeah, your company and uh, the, the heart of american homes is really there for people and yeah, that's very emotional.
Speaker 1:I, I like to, I like to help people that are in need yeah, I, I, I like to say because I think it's accurate the heart American Homes is really our great agents because they really rally around that organization and it's a true foundation with 100% of money raised going back into the community. You know people of need, so what's an example of commercial real estate project that had a major positive impact on community?
Speaker 2:I would say multifamily, you know, has more impact on community than anything because it gives more people places to live at a you know, at a good price, depending on where it's going to be. The boroughs are very big for that. They knock down condemned buildings and build beautiful places for Section 8, which is, you know, people who can't afford it need a place to live, and it's important. So I think apartment buildings. Multifamily is definitely more of an impact in commercial than anything else. I mean, no one's going to get excited over an industrial property that's producing ice cream.
Speaker 1:I mean, nobody really cares about that, you know.
Speaker 2:Yeah, exactly, they care about people living and going to a good school system.
Speaker 1:Although the warehouse does help support the tax base. Yes, of course, of course.
Speaker 2:But normal people don't feel that as an impact. Yeah, you know the people that think about how much they're paying in taxes and how much the properties are absorbing. The taxes are very few and far between. So you know the word impact means more majority than not. So I think the multifamily sector has really made more of an impact on real estate.
Speaker 1:There we go.
Speaker 2:It's time for the drop the mic question.
Speaker 1:If you had to be locked inside a commercial property overnight, which property would it be and why I?
Speaker 2:would like to be locked in a gym. I would go to the gym only because I wouldn't have to wait for a machine. I can just do a circuit any way I want and do it on my time frame. Yeah, and I could also go behind the counter and make myself a nice shake, and do everything I possibly can. So yeah, as crazy as that sounds, I think a gym would be great, all right, very cool.
Speaker 1:Well, tony, I really appreciate you taking the time to be here on the Work Hard, play Hard and Give Back Real Estate Podcast. Yes, I'm blessed to be here.
Speaker 2:Thank you so much.
Speaker 1:We're really excited to see what you're doing and what you've done already with the commercial opportunity that's there and its growth has been exponential. Thank you, it's very impressive. I didn't do it myself, it's a team effort yeah. Well, we're looking forward to see where you take this thing, and I'm sure it's going to make a major impact across the marketplace. Yeah, I appreciate it very much, thank you.
Speaker 2:Thanks for having me Absolutely.
Speaker 1:Now. If anyone in our audience wants to either reach out to you with a commercial opportunity, a commercial referral, how do they reach Tony Berguglio? Oh, beautiful there we go.
Speaker 2:Mr Litzner, you can call me my cell, which is 631-919-7492. Okay, it's the simplest way I always answer my phone. If I missed your call, I call you back in 38 seconds. Okay, we have a website. Yes, it's cbcamhcom, that's Coldwell Banker Commercial amhcom, so it's just abbreviated cbcamhAMHcom. We have about 60 or 70 properties up there right now, so you can look at them all and we can help you with buying and selling or leasing or getting you a tenant, whatever you need.
Speaker 1:Perfect, perfect. All right, tony. Thanks so much for being part of the show. Thanks, mike, I appreciate it. So remember, stay tuned. New episodes come out every two weeks on Wednesday. Please like and subscribe. We'd love to have your.