How Bill Himmelstein Builds a Commercial Brokerage Through Relationships, Referrals, and Smart Investing

Bill Himmelstein (00:00)
But when you build relationships, every day you’re building another relationship and another relationship. Pretty soon you’re a snowball rolling downhill, just picking up more and more relationships. And so when those people have a need, they’re not waiting for a broker to cold call them. They’re calling me.

Michelle Kesil (01:48)
Hey everybody. Welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil And today I’m joined by someone I’m looking forward to chatting with, Bill Himmelstein, who is a commercial brokerage part of Tenant Advisory Group. So I’m really excited to have you here today,

Bill Himmelstein (02:07)
Thanks, Michelle. I appreciate the opportunity.

Michelle Kesil (02:09)
Of course. So let’s dive in. First off, for those not yet familiar with you and your work, can you share what your main focus is?

Bill Himmelstein (02:18)
Yeah, so I started Tenant Advisory Group about 17 years ago to focus on representing the end user of real estate. So that’s the tenant, the buyer and the seller. And we do that across office, industrial, warehouse and medical space. We do a little bit of retail, not a lot, but it’s all about representing the business owner and making sure that they’re getting a fair deal, whether they want to purchase, sell or rent the commercial space for their business.

Michelle Kesil (02:47)
Awesome. And which markets do you operate in?

Bill Himmelstein (02:50)
Yeah, so, you know, I started here in Chicago, Illinois, and we, that’s kind of our main market that we focus on. Although now I would say 50 % of our revenue comes from outside of the Chicagoland area. So big markets for us are Los Angeles, San Francisco, New York, Dallas, Houston. We’re now doing a lot of stuff in Nashville, Denver. I grew up in Kansas city, so I’ve always got relationships there.

So really it’s anywhere in the country that a business might have a need.

Michelle Kesil (03:22)
Amazing. And so you mentioned that you’re typically working with the end user is that investors as well.

Bill Himmelstein (03:30)
Yeah, great question, Michelle. What I have found with investors is that they’re looking for a diamond in the rough. And if I find that diamond in the rough, it’s not going to go to someone that I don’t know very well. It’s going to go to the people that I typically invest with. And so I make it a point not really to work with investors because they’re looking to make their money on the real estate and they want to make it on the purchase. Meaning when they buy something, they’ve already won.

Well, if I find that deal, it’s not going to go to them. It’s going to go to the people that I’ve already invested with. And so when we’re working with a business owner, yes, if they’re purchasing real estate, they still want to get a good deal, but they make money from their business and it just needs space to run out of. they’re less concerned with getting the best deal possible and more concerned with finding a space where their business can successfully operate. So there’s a huge difference there, right?

That leaves a lot of opportunities available for the business owner and very, very few opportunities for the investor. I just don’t have time to find an investor the greatest deal possible because when I do find the greatest deal possible, I’m going to take it. That’s, I mean, that’s, so that’s why we don’t work with investors.

Michelle Kesil (04:41)
You

That’s fair. And so as an investor yourself, what does that look like for your business? What are those type of deals that you’re personally tracking and looking to go after?

Bill Himmelstein (05:42)
Yeah, great question, Michelle. So first of all, I don’t really seek investments personally. I seek great people that are skilled in that area and that do that day in and day out. So I will invest with others. And typically the asset classes that I like to invest in are the ones that I see, A, have the most upside and B, have the most room for error. And by room for error,

I basically mean vacancy. If you have vacancies, you can still be profitable. If there’s things that go wrong, like the property needs to be repaired, you can still be profitable. And what I’ve seen throughout my entire 25-year career, this has not changed over time. Office is one of the worst investments you can make. And what I mean by that is when you have a vacancy, it’s going to be extremely costly.

to your cash flow. In fact, you might start having negative cash flow if you have vacancies. ⁓ There’s huge costs to a transaction. So when you bring in a tenant to office space, there’s a huge amount of free rent. Thankfully, there’s huge commissions being paid. Usually, I’m on the receiving end of those. ⁓ You know, it just takes a long time when you sign an office tenant. It usually takes four to five years before that landlord even breaks even.

on the deal. So I try to avoid investing in office unless it’s a single tenant office building and you’ve got the tenant. If you have the tenant, you then have value in office space. However, when I look at industrial, I look at a much more sticky tenant, one that’s going to be staying in place for a lot longer. Their average lease terms are longer. Their average stay in the same space is a lot longer than office users.

Office users are oftentimes fluctuating far more widely in size, whether they need more or less space, whereas industrial users, it’s a lot more steady, right? So that’s why they’re staying in the same space for a longer period of time. But the best investment in all, in my opinion, right? I’m not the end all be all here, but it’s residential. It’s multifamily residential and even more specifically, it’s class B.

The reason why I say that is, so let’s say you’ve got a hundred units. There’s a chance that if you buy this thing correctly and you finance it with the right terms, you could have 70 % occupancy and still be cashflow positive. ⁓ The cost to land a new tenant is not that high. You know, in some markets you may have to give away one month of free rent. ⁓ Most markets, just, the second they sign up, they start paying rent. ⁓

You know, if you’re in the right market, you’re going to have high occupancy rates. There’s not a ton of cost to maintain it. You might need a property manager. And of course, when things break, you got to fix it. But I’ve just found that multifamily residential over time provides for the most appreciation. It also has the greatest opportunity for built in your manufacturing, your own appreciation. And by that, mean.

upgrading the units so you can charge more rent. You can’t really do that in office space without a giant investment. It’s hard to do that in industrial. You don’t really want to put a bunch of money into an old, tired space because you’re still going to be able to get a decent rent in industrial because people that are going to be in there, they don’t want a pristine, gorgeous space. They’re going to be making some product and it’s not going to be a very clean business anyway. So

My orders of asset classes that I’ve wanted to invest in for the entire 30 years I’ve been investing in real estate, multifamily residential, industrial, and preferably multi-tenant industrial. So you can manage your risk a little bit better in case you lose a tenant. And then after industrial and multifamily residential, it’s probably medical, which medical tenants tend to stay put for a very long time. also, doctors have the best credit.

which is why banks will lend to them at 0 % down. So they don’t even have to make a down payment. So medical is very steady, although your returns are lower because it’s far less risk. And then once you get below medical, way down at the bottom is retail and office. And then the only way I’m going to invest in either of those is if we’re buying appropriately, right? If we, for retail, if we’re getting it at a great price where we could turn around and sell it for a profit, that I would invest in.

Same thing with office. I only want to invest in office space if we have the tenants already in place for long-term leases with personal guarantees, know, minimizing your risk. But that’s just my approach. And you’re going to find a lot of REITs and sovereign wealth funds out there that that’s all they’ve loved is office space their whole lives. Now, they got the bag handed to them in the pandemic when the valuations of office properties nosedive 50 percent or more. ⁓

But, you know, and retail is tricky too. It’s all about location, the tenant mix, ⁓ the credit worthiness of those tenants, and then the length of term of the leases. So I don’t know. I hope I wasn’t a little too long winded there, but that’s my thought process with investments on the real estate side.

Michelle Kesil (10:56)
Yeah, okay, amazing. Thanks for sharing your perspective there.

Bill Himmelstein (11:35)
Sorry if I put you to sleep.

Michelle Kesil (11:38)
No, don’t worry. Okay, so and what would you say have been some of the main keys that have allowed you to be able to grow your business and yeah, have it run successfully?

Bill Himmelstein (11:52)
Beautiful question,

Michelle. And this is something that I learned from my parents at a very early age. And we all have learned this at some time or another. And it’s basically treat others as you want to be treated. You know, there’s a lot of people on the brokerage side. There’s a lot of competitors, right? There’s so many folks out there that know how to do what I do. But to put things in a perspective, those brokers

do an average of five to seven transactions a year, maybe a busy one does 10. I do about 40 a year. And the reason is because I’m treating others how I want to be treated. So when I meet a business owner, I’m not asking them about their lease and their real estate needs and trying to tell them how great I am and how I can help them. I’m asking them about their business and who their ideal clients are. And so I can understand who in my network I can introduce them to.

that will support the growth of their business. That’s Michelle, that’s all a business owner thinks about is how do I make more revenue? How do I grow my business? And for those people that say that give me a referral and they go, Bill, I thought of you. was talking with someone that needs space and I thought of you. That blows my mind. Just means the world to me that someone else is helping me is helping me grow my business and grow my revenue. So that’s what I try to do to others. You know, we’ve got

As you can see over my left shoulder here, we’ve got the hardware. We’ve won so many awards. I’m losing track. We have far more Google reviews and by the way, all five star Google reviews than any of my competitors. mean, exponentially more. And the reason is because we’re treating our clients as if it’s our business. I don’t want my clients to overspend on their space because I don’t want to overspend on my space. You know, I’m trying to help my clients grow their business.

because I’m hoping that they’ll do the same for me and refer me to their clients and they’ll come back to us when it’s time for a renewal or an expansion or they outgrow a building that they need to sell and buy a new one. So what I was taught at the other firms that I worked at earlier in my career was that it’s all about money, right? It’s about getting hired, closing the deal, making as much money as you can on the deal as possible and moving on to the next one. That did not sit right with me.

Of course I want to be profitable. Of course I want to make money, but I don’t want to do it at other people’s expense. I want to build a bigger pie. I want us all to do well together. And that’s how I’m going to become an indispensable piece of their network. I’m going to become someone that they think of when they need, you know, a labor and employment attorney, or they need an insurance broker, or they need, you know, a wealth advisor. I don’t care what it is they need.

I love getting the call from my clients and prospects, Hey Bill, do you know somebody that can help me with this? That means they trust the relationships that I’m building. That means they see that I value the relationships and the trust that I’m trying to build with others in my network. So it means a lot when they will reach out to me, especially with a referral, because that means they trust that I’m going to take care of the person that they’re sending to me. And so

That’s how I run my brokerage business. And Michelle, that’s the same way that I try to find people to invest with is those that are going to treat the investor as if it’s their own money. They’re going to put the investor on an equal par with themselves, which means that they do well as ⁓ the GP, the general partner of the deal, that I’m going to do well as the LP, the limited partner of the deal. And so finding people that

value the person across the table and treats them as such, treats them with respect, treats them as if they’re important and valuable. Those are the people that I want to both invest with and have as my clients because that’s how we’re all going to grow together. We’re going to build a bigger pie for all of us rather than that selfish investor or selfish broker who’s just trying to get a bigger piece of the pie for themselves. They’re not creating value.

They’re taking value from others. And look, to each his own, I get that the traders, right? People who are trading stocks, that’s all they’re doing. They’re not creating value. They’re just quicker or luckier than someone that’s on the other end of that electronic trade. They’re taking money from somebody else. And so that’s just not who I want to be as a person. That’s not who I want to be as a business owner. And that’s not who I want to be as an active investor. I want to partner with others where we all

can win or lose together.

Michelle Kesil (16:27)
Yeah, amazing to have that people person and yeah, like networking approach to business.

Bill Himmelstein (17:17)
Thank you. mean, it takes time, but I remember my early years, they taught us, you you got a cold call to win business. I felt like every day I came into work, I was starting at ground zero. I had nothing every day. All I was doing was calling random people who I was interrupting their day and what their comment was, well, it’s a numbers game. You’re right. The more dials you make, eventually you’re going to catch somebody that has a need.

and it’s not annoyed to hear from you.

But when you build relationships, every day you’re building another relationship and another relationship. Pretty soon you’re a snowball rolling downhill, just picking up more and more relationships. And so when those people have a need, they’re not waiting for a broker to cold call them. They’re calling me.

Same thing with people that are trying to raise capital for investments. They know that I’m going to be a value added investor, meaning I will make suggestions of

ways I think that the ⁓ project can go better, but I’m not going to fight them and make them do what I’m asking them to do. So they want me to invest with them because they know that, A, I’m going to try to make it a win-win for everybody and B, I might bring in other good people that are going to say, hey, we believe in Bill. And if Bill is telling us to go into this, then we believe in you. Here’s our money. I hope you can turn it into more. And so, yeah, mean, Michelle, I think

As much as we’re becoming a tech enabled society with AI, at the end of the day, it’s still about relationships and people you can trust. And that’s what I’m trying to build my business and my investment portfolio over with people I can trust and that they can trust me.

Michelle Kesil (18:54)
Yeah, amazing. And so what are you most focused on scaling to next?

Bill Himmelstein (19:00)
Yeah, that’s a really good question, Michelle. I get asked this a lot. It’s like, what’s next? And I don’t know. I am so happy with my life right now. I’m not trying to be the next CB Richard Ellis. I’m trying to provide a wonderful life for my family. I’m trying to provide a nice life for the people that work with me. And I’m trying to provide a nice life for, you know,

not just my team members, but my clients. And I’m having so much fun doing what I’m I honestly, I want to stay healthy. I want to, I’m enjoying watching my kids grow up and achieve and accomplish and move on to the next stage in life. I feel like in five years from now, if I’m still having this much fun, I’m doing something right. You know, like that’s what we all want is to.

have a life of fulfillment and a life of enjoyment. I’ve never, you know. To me, it’s not about what the Joneses are doing and what someone else tells me what success looks like. Success to me, I found it. I’m not the richest person, right? I’m not the most successful person, but I sure am happy and I sure enjoy my life and I enjoy waking up and I don’t care what direction I’m going, whether it’s to go be with a client.

to go on a date night with my wife, to go out with friends, to be with my children. I am happy. There’s very little time. There’s almost never a time I can think of where I’m like, ⁓ man, I can’t believe I have to be doing this. I don’t like this. I don’t want to do this. I’m happy with just about everything that I’m doing in my life. And if that can continue, then hallelujah. You know, I mean, that’s I think that’s wonderful. Now, eventually, you know,

I do recognize that here’s what I’ll tell you, Michelle. We have, I’m keeping probably six brokers, commercial brokers, not at Tenant Advisory Group, busy. That’s not what I want. I want brokers at Tenant Advisory Group to be busy and not someone at other firms that I’m referring deals to. So I think ultimately what will probably need to happen is I will need to allow Tenant Advisory Group to get purchased.

by a slightly larger firm. I will never allow myself to get purchased by CB or Jones Lang LaSalle. I know how they treat people. They treat people like dollar signs. How much money can we make off of them? How much of their pie can we get onto our plate? I will never do that. But I will find a mid-sized commercial real estate firm that can accommodate all of the business owners that want to work with me.

And so at the very least, I know I will be giving them to somebody that shares similar values, that cares about them as much as I do. So that’s probably business wise. The next thing I’m going to be working on is finding that firm to purchase to my advisory group. And then I can bring all my referrals in-house and keep it, keep it there. But I’ll tell you, Michelle, I’m having a lot of fun along the way. And I, I pray that that continues.

Michelle Kesil (22:07)
Yeah, amazing to be in that place.

Bill Himmelstein (22:10)
I feel very fortunate. And that’s the thing also is that the attitude of gratitude, right? I feel very grateful. Even when times aren’t going, I remember COVID, holy moly. That was not fun. That was not a good time, but I still was able to remain grateful by saying, Hey, at least we’re still in our house. We’re not like a restaurant that literally can’t welcome people into their place of business. They’re not allowed to. ⁓

And so I think that’s important to have that attitude of gratitude, find what you’re grateful for and, you know, embrace that.

Michelle Kesil (22:45)
Definitely. Well, before we begin to wrap up here, if someone wants to reach out, connect, and learn more, where can people find you?

Bill Himmelstein (22:55)
Absolutely. Thank you for asking that. You know, the easiest way to connect with us is on our website, ⁓ www.tagcommercialbroker.com. That’s T-A-G commercialbroker.com. There’s plenty of tabs that will say, contact us. Unlike most firms, contact us, go straight to me. I get that email in my inbox and I respond to it.

right away, even if it’s not something that we can help with, I will get you to somebody that can help you and can solve your request. you know, go to tagcommercialbroker.com, click on the contact us and that email shows up in my inbox.

Michelle Kesil (23:36)
Perfect, we’ll appreciate your time and your story. Thank you for being here.

Bill Himmelstein (23:40)
Thank you for having me, Michelle. I appreciate it.

Michelle Kesil (23:42)
And for those tuning in, if you got value, make sure you’ve subscribed. We’ve got more conversations with operators who are building real businesses, and we’ll see you on our next episode.