Creeksides | Image provided by Lake Washington Partners
To further Leverage.com’s mission of democratizing knowledge about commercial real estate, we started an interview series with all kinds of CREF pros: everyone from multifamily and medical to cannabis and construction. This time we connected with Jordan Lott, President of Lake Washington Partners, a family-owned commercial real estate investor and developer focused on office and industrial properties.
What are the benefits of working with a family-owned CRE investor?
As a family-owned and family-run business, we are able to demonstrate to global real estate investment companies who we are, the breadth and depth of our local market knowledge, the expertise of our local team, and the ability of our family business to quickly and seamlessly execute on the investment process. We take a long-term approach to most of the things we do — it’s one of our family values, and we routinely trade short-term gains for long-term appreciation.
That style of thinking lends itself well to commercial real estate. We can think in 10-to-20-year intervals as opposed to being burdened by the need for short-term returns. This alignment between business values and family values makes my job much more rewarding.
Corporate Campus East | Image provided by Lake Washington Partners
Are there types of industrial properties investors have been overlooking in 2021?
With the amount of capital in the market chasing industrial deals, it’s hard to say that buyers are overlooking anything. This may be a time when patience is rewarded more than aggressive underwriting. The commercial real estate industry tends to pay people when transactions occur, so it’s natural for people to want to get deals done. However, today’s low cap rates may prove to be problematic for owners in the future.
What changes have you seen in office property investment, management and development?
The office market is clearly in a state of transition. There is a very real question about the purpose of office space in a COVID world. That uncertainty is forcing investors to rethink the value and purpose of an asset that may have a different function in the future. This dynamic is further complicated by a labor shortage, shifting employee preferences, and a booming economy.
In most cases, in the near term, much of the office market is different from the historical realities. The corner office and dedicated parking space of the 90’s were assets, appreciated by senior leaders in our tenants’ organizations. We tore many of those elements out to accommodate millennials who did not want to feel isolated, who appreciated the community aspect of the open office plan, and preferred to Uber to work. Now we have companies rethinking that same space to accommodate a workforce less likely to come in on Fridays and who may not require a dedicated workspace.
Eastpointe | Image provided by Lake Washington Partners
Can you tell us a bit about your work as Research Foundation Governor for NAIOP?
NAIOP is a trade organization that represents 19,000 members primarily in the U.S. and Canada. The organization focuses on advocacy, education and business opportunities. I have chosen to contribute my time to their education initiatives because I believe there is a benefit to funding research centered around real estate.
As a Research Foundation Governor, I try to create content that is both meaningful to the members and that furthers the success of the industry. I believe there is an art and a science to what we do, and furthering academic research allows the real estate industry to have access to premier data that fuels its growth.
It’s great that your company donates to community stewardship. To motivate other investors to do the same, are there any business benefits?
I think there is a false stereotype that “for-profit businesses” who give back are just taking dollars out of net income and giving that money away. Some believe that every dollar they donate is one less that they make. I don’t believe this. I think a commitment to the environment, our community and our employees can make a company more profitable, not less. When we give back, our employees are more engaged, our tenants are more likely to work with us, and our communities appreciate what we do. We can actually make more money, by being participating members of the broader community, not less.
I was once laughed at when I told a group of brokers that among other strengths, we were nice people and good to work with. There was clearly a sense that this is a “dollars and cents” industry and that their client should only look for the best economic deal. I don’t subscribe to this theory. I believe our success demonstrates that our approach and our values have merit….not to mention I did get that deal.