How Investors Find Hidden Land Opportunities in Commercial Real Estate

Peter Quinn (00:00)
I think there’s an opportunity here to sell the property. So, Mr. Mrs. Smith, ⁓ here’s what’s going on. ⁓ Looks like the uses are changing here. Would you have interest in selling? Now, we’d like to consider that. Well, if you sell it today, the price is $2 million. And they shake their heads and go, that’s interesting. I but if you’re willing to wait until the property gets re-entitled,

by the buyer of the property. I think we can sell this for $6 million.

Cody Crabb (02:05)
Welcome back to the Real Estate Pros podcast by Investor Fuel. I’m your host, Cody Crabb, and today I’ve got Peter Quinn with Kidder Mathews in San Diego. Peter’s a commercial real estate broker who helps identify where properties need to go next, leasing, sales, redevelopment, or turning outdated uses like greenhouse operations into future housing opportunities. This sounds really interesting to me, Peter. I’m really excited to learn about this. So thanks for joining us.

Peter Quinn (02:06)
Thank you.

Thank you.

Thank

It’s pleasure being with you, Cody. Thank you.

Cody Crabb (02:31)
Yeah, so you said something interesting before we started, which is a lot of what you do is looking at properties that want to become something else. I’m excited to get into that. Why don’t you give us a little bit about you and kind of your qualifications and things and experience. And then let’s talk about that a little bit.

Peter Quinn (02:49)
Excellent. So background, I’ve been in commercial real estate since 1980. I had a short career out of college with IBM, ⁓ was ⁓ fortunate enough to be hired by Cobol Banker Commercial Real Estate in Newport Beach. Unbelievably great training ground for me. ⁓ And really from the get go, my focus was on land. ⁓ In the early 80s, there was a lot of land in Orange County.

that was then developed, and I made it my mission to understand where all of those parcels existed, who owned them, and what their long-term goals and objectives are. Since then, I have been partners in commercial real estate development companies. ⁓ Practically half of my career has been developing office in industrial ⁓ buildings with partners throughout California. I’ve also worked

in the nonprofit world ⁓ and been an advisor to corporations from around the country like Eastman Kodak, Eli Lilly, Texaco USA. ⁓ I love commercial real estate. I love the land portion of it. It’s harder today than it ever has been because as you mentioned, I’m looking for land opportunities and they really don’t know that they are opportunities. are

bumping along, producing whatever product or service. And I look at that piece of property and go, you know, I see 25 homes there that can serve as ⁓ middle income families. Let’s see if we can’t make that happen.

Cody Crabb (04:30)
Yeah, so I think ⁓ first of all, I think it’s interesting that ⁓ what made you choose commercial real estate over these other kind of, mean, there’s a million different ways you could have gone with that. I’m just curious what drew you to commercial.

Peter Quinn (04:43)
So ⁓ I was in a super competitive environment ⁓ with IBM ⁓ and had a number of my co-workers, ⁓ men and women about my age who’d been in the business about that long who maybe thought when they got hired by IBM they were going to stick around for 25 years. And I was probably one of those. little, know, one by one.

Cody Crabb (04:49)
Imagine, in the 80s, yeah.

Peter Quinn (05:13)
these men and women left IBM and the majority of them went into commercial real estate. So I made the decision after about three years at IBM, that’s what I wanna do. Now didn’t know why I wanted to do that, but the people that left were smart, I liked them, ⁓ and it turned out to be a really fortuitous decision.

Cody Crabb (05:19)
Interesting.

the

You know, I it’s funny that you say that because you make it sound like, don’t know, like, whatever. But I think that’s a very not only is it a valid reason to get into real estate, I think a lot of people just look at like who’s who are the rich people, all the real estate people. All right. I guess I’ll do that. So that’s pretty that’s pretty valid, I guess. So all right. What is it? Since you’ve been watching land specifically.

Peter Quinn (06:29)
Right.

you

Cody Crabb (06:47)
You know, what, well, let me before I get into that, when you look at a property, what tells you like, this could be, this is underused. This could be improved.

Peter Quinn (06:51)
Thank

I think that the reasons that it could be used in a different way or reused could be the building. It could be functionally obsolete. ⁓ It was an industrial building built in the 70s with 15 foot clear heights. That was as high as people wanted to stack product and materials. Today, buildings are being built with 36 foot clear heights. ⁓ There’s just, so it could be

that the property gets reused as an industrial use again, but that the building no longer ⁓ fits. ⁓ It could be that ⁓ zoning has changed. The rules have changed. ⁓ City of California, where I am, has created a number of incentives to get people that own real estate to look at it as future home development opportunities.

for affordable housing, for mid-level housing, and for executive housing. And when government subsidizes and or ⁓ creates ⁓ opportunities and incentives to change the use on a piece of property, there’s opportunity there. And that’s where I get attracted.

Cody Crabb (08:19)
So how do you kind of find these deals? Is this one of those things where you kind of are looking around and you see like this, like, ⁓ I don’t know, this is a terrible example, but like some kind of like a circuit city, like that’s a bad example, but you know what I mean. Like you see something that you’re like, that doesn’t exist anymore. And then you can kind of start to imagine maybe the technology advances now have kind of allowed for some new uses or maybe the, like you said, the laws and regulations have made it so that you can now use

it for from some different things.

Peter Quinn (08:51)
know, Circus City is really a pretty good example. It’s just ⁓ a box, concrete, tilt-up box with a nice glass storefront ⁓ in a ⁓ suburban shopping center. exactly, and people don’t need that box any longer. They can go online and order that product ⁓ from Amazon. ⁓ I still like to go to Best Buy, for instance, but I understand that in five years they may not be in business.

Cody Crabb (09:05)
Big red cube on the front. sorry. Yeah.

Yeah.

Peter Quinn (09:21)
I hope they are because I love going and touching the product. ⁓ markets change. The internet has changed the way people ⁓ view product acquisition from groceries to cars. ⁓ And so you have to look at the real estate as it is and go, you know, that doesn’t really make sense anymore. I think what we ought to be doing there, and here’s a really interesting example.

Cody Crabb (09:38)
true.

Peter Quinn (09:51)
⁓ I think what we ought to do is we ought to put a high-end nursery and coffee shop in that space. Now it used to be a Marie Callender’s, which you may not recognize that brand,

Cody Crabb (10:02)
I’ve got one literally down the road, restaurant, literally right down the road. Yeah.

Peter Quinn (10:05)
So

25 years ago was the Marie Callenders. Marie Callenders left the building. ⁓ Residential real estate company moved into the building and operated successfully ⁓ for probably a dozen years as well. And then it sat vacant for almost 10 years. And a entrepreneurial nursery development group ⁓ came into the property. They’ve leased it long term.

They have turned it into the most interesting, exciting, fun place to walk around. If you love plants and you drink coffee, ⁓ they’ve created this environment which brings you in and then gives you the freedom to stroll through their product offerings. the way that they display it, it’s just fantastic.

Cody Crabb (11:37)
I’m

thinking of a couple of my friends that would jump out of their chairs running to that place if they knew where it was. So I definitely can see the appeal. Yeah.

Peter Quinn (11:39)
Thank

Exactly.

And five years ago, nobody would ever have thought, well, that’s a great place for a nursery. Right off the freeway on a major ⁓ North County street, not the best place one would think for that use, but it’s fabulous.

Cody Crabb (11:53)
Very, yeah.

I guess that sparks another question, which is how are you seeing these uses when other people aren’t? Because like you said, people might not have said that was a good spot for that, but somehow that’s something that you saw?

Peter Quinn (12:16)
Well, ⁓ I thought after the fact, I mean, it was already being developed at the site ⁓ before I became aware of it. It happens to be near where I live, so driving by it. I happen to know the owner of the nursery company. ⁓ Fantastic story. Ten years ago, the guy was cutting lawns. And then he went, well, know, while I’m here, maybe I should be asking if I can plant some trees.

Or you could really use a hedge there. ⁓ And then that developed into a gigantic business. ⁓ This individual and his family, they own thousands of acres. They’re growing plants ⁓ for distribution to not only their own retail stores, but Lowe’s, Home Depot, et cetera. It’s the American dream.

Cody Crabb (12:55)
Whoops, yeah, that’s awesome.

So like, give me an example of a situation. You gave me a greenhouse to living space example earlier. ⁓ I’d love to know kind of what is the process of this? Like, do you kind of stumble upon an entrepreneur that wants to do something like this? Do you kind of see somebody out? Like, what does this look like usually?

Peter Quinn (13:33)
Well, the developers are a known ⁓ entity of businessmen and women. At any given time, there are 50 different companies I could call when I find a piece of property that I think should be redeveloped. How I find the piece of property to be redeveloped ⁓ is manyfold, but it often comes from a referral.

People know that I understand the development and the entitlement process. Entitlement is the process of taking a piece of property that is a greenhouse, ⁓ has zoning to grow plants and retail sale those plants. And I look at it, it’s now in the middle of a community. ⁓ Everything around it is built into single family homes. And I go, well.

I think there’s an opportunity here to sell the property. So, Mr. Mrs. Smith, ⁓ here’s what’s going on. ⁓ Looks like the uses are changing here. Would you have interest in selling? Now, we’d like to consider that. Well, if you sell it today, the price is $2 million. And they shake their heads and go, that’s interesting. I but if you’re willing to wait until the property gets re-entitled,

by the buyer of the property. I think we can sell this for $6 million.

Are you able to wait for two to three years while that process rolls out?

Cody Crabb (15:51)
Are you able to

sit on this building that has likely been abandoned or not used very well for the last, just a little bit longer. It seems like a pretty easy sale to me.

Peter Quinn (15:58)
Well, and.

Well, and that is sometimes what happens. Oftentimes they have a lease, but the lease from a greenhouse ⁓ operator might be a fraction of what its value is. In fact, it is a fraction of the value that ⁓ a developer would pay to take the process, take the property through the process, and at the end of two to three years, get the right to build x number of homes.

which justifies a $6 million purchase of the property. And so given patience and time, those two things create great opportunities for holders of real estate.

Cody Crabb (16:43)
Yeah, this is pretty interesting. feel like there’s, I mean, there’s probably opportunity just about everywhere, but I think it makes it seem like when you’re in somewhere like California in general, like an urban area like San Diego, you kind of think of that as like, it’s done, like no developments happening unless we’re kind of re, you know what I mean? So I feel like that’s an interesting way to look at it, because you’re kind of bringing new life to something that maybe was not there before.

That’s pretty neat.

Peter Quinn (17:15)
Well, the land business when I started was big tracks of land that were undeveloped. mean, it’s called greenfields. That’s what the term is. There are no large pieces of property or very few large pieces of property where you can build 250 homes. ⁓ So the large home builders have all sort of pivoted to 20.

to 50 ⁓ home development projects. ⁓ There still are areas in Utah and Nevada and ⁓ desert areas in California where you can buy 100 acres and get a big development, but that’s not the bulk of where ⁓ things are moving. In particular, areas, as you said, like San Diego, it’s pretty much all developed.

And what’s funny about that is, I remember 20 years ago, former partners of mine and I were looking at where opportunities were and they both said, you know, there’s just no land anymore. It’s just, you know, that business is not going to be here. So we have to pivot our focus and attention to something else. And I looked at them and thought to myself, I see land every place.

I see land, there’s land everywhere. It just isn’t in the condition that is going to create the highest and best use. So it’s harder for sure than it was in 1980 or 1990, but it is no less fun.

Cody Crabb (18:37)
you

So what’s next for you? What’s your next big thing that you’re hoping to do? Are you kind of looking for your next property, your next project, or what are you doing right now?

Peter Quinn (19:01)
I’m always looking for another way of cracking into marketplaces. ⁓ Some of that transitional ⁓ ownership has manifested itself to me through attorneys, trustors for trusts, for whom ⁓ a document has been developed for a family. You know, your mom and dad.

are in their mid-60s and they own a piece of property that they raised your family on. It happens to be seven acres and development is encroaching on that seven acres. They don’t need it. You have two siblings, so now there three of you. Well, what do we do with this property? Well, I highly recommend that you get an attorney or a trustor involved as soon as you can. Get your will and trust in absolute airtight condition. ⁓

and be very clear as to what you want to have happen. So I am working with attorneys and trustors to make sure that their clients have a plan in place because I can’t sell that property for your family, until I know where the money’s going to go and that everybody’s interests have been addressed. You may not like the way your mom and dad decided to.

distribute the proceeds on property sales. so that is, I’m pivoting towards other ways of identifying opportunities. that attorney trustor relationships.

Cody Crabb (20:28)
⁓ That’s on them though, yeah. Not on you. Yeah. Yeah. Yeah.

Great.

Cody Crabb (20:45)
so ⁓ this has been great. So Peter, if people want to work with you, who should reach out to you and where can they find you online?

Peter Quinn (20:53)
Well, ⁓ Kidder Mathews has a very extensive website. ⁓ So you can search on ⁓ www.kidder.com. You can search under Peter Quinn. You’ll find me. If you Google Commercial Real Estate San Diego, I should come up in the top five. ⁓ And ⁓ people that should contact me are ⁓

Cody Crabb (21:19)
Awesome.

Peter Quinn (21:19)
Individuals, family offices, ⁓ service providers to those groups who have identified excess or surplus properties that should have some attention paid to those assets. I’m available to answer any questions, no obligations. Happy to be a resource to that group of folks.

Cody Crabb (21:39)
Fantastic Peter. Thanks so much. Our audience should definitely take advantage of that. and so thanks so much for giving us some of your time today and thank you audience for doing the same. If you liked what you heard today, and I know you did, there was some good stuff in here. Go ahead and give us a like, subscribe, comment, all the things and make sure you follow us so that you don’t miss another great conversation like this one. Peter, it’s been a pleasure. Thanks so much for giving us some time today.