Why Commercial Real Estate Deals Are Getting Harder to Pencil in 2026

Brittany Megrath (00:00)
my gosh. Scott, it is crazy out there with these with these sellers. And I honestly cannot say if there is a ⁓ market right now that is being overlooked in a way that, you know, if we looked under a curtain in the right spot that it would be cheap and all the economics would be beautiful. Because I can tell you right now that we are calling markets tertiary markets, secondary markets, primary markets, and you know, all in

you know, all across the country, all different states. And these owners all are really just twisting your arm for the price point on their property.

Scott Bursey (02:10)
Welcome back to the Real Estate Pros podcast powered by Investor Fuel. I’m your host, Scott Bursey And today we’re joined by Brittany Megrath of M Square Commercial. Brittany has achieved something truly impressive. She’s scaled operations across 60 markets in 15 states, all the while maintaining a high volume standard of over 100 million in transactions. We’re going to dive into how she balances systems and people to manage the kind of growth.

And how to handle market volatility that all the pros are looking for the answers for. The hidden metrics that she uses to vet deals and so forth. If you want to know more about this operation at a massive scale without sacrificing excellence, this episode is for you. Brittany, welcome to the show.

Brittany Megrath (03:01)
Hi Scott, thanks for having me.

Scott Bursey (03:02)
It’s just awesome having you here and please tell us a little bit about yourself and M Square Commercial.

Brittany Megrath (03:07)
Sure. Brittany Megrath. We own M Square Commercial based in Las Vegas and we specialize in representing developers, expanding single tenant net lease deals from the ground up on a national scale. So we like to call ourselves asset class specific and market agnostic.

Scott Bursey (03:25)
That is impressive spot on. Brittany, what really caught my attention about you was the way you’ve been able to scale operations across sixty markets in fifteen states while maintaining that high volume one hundred million dollar transaction standard. That quite frankly is the gold standard.

Brittany Megrath (03:43)
It’s been an exciting journey, ⁓ definitely. And most of that has been through broker networks and our clients, of course, the developers. And we’ve really turned ourselves into a brokerage that is a developer resource. We are a tool for developers to utilize for them to be able to expand faster, sign find sites faster.

And really our value is is that we are not market specific. So if they have an assignment in Tennessee or an assignment in Washington or Oregon or Florida, we will go in, we can utilize our local broker relationships, our market knowledge, our systems, and really kind of dive into these corridors and help dig out some opportunities for them to hopefully put their deals together.

Scott Bursey (04:34)
And there’s a lot of value in that. Brittany, when you operate in sixty markets, how do you ensure the standard of excellence stays consistent? You know, is it the systems or is it the people?

Brittany Megrath (04:46)
That’s a great question. And it’s tough. And it’s something that we really try to ⁓ pay attention to and take pride in. So what’s different from us from a traditional brokerage firm is that because we’re not market specific, we are learning something new all of the time with these assignments. So if I was just a local broker here in Las Vegas, you know, 10 years in, you would have the city memorized, right? You would know.

players, a lot of the developers, all of the intersections, the traffic patterns, the zoning code, it would be memorized pretty much. Like different owners change, but you would have such a great pulse on the market. And that is that is valuable, right? That is what a lot of brokers specialize in, and that is an amazing trait. What we do is a little bit different because we are asset class specific

We have created a process that really allows us to travel across markets. And when we do this, we are performing new due diligence all of the time. We are very research heavy. So it does take us ⁓ a little bit more sweat in order to dig out those opportunities because we are calling new planning departments. We are researching new zoning codes.

⁓ but we’ve got a great team in place. We’ve got a great system in place that really allows us to perform this extra work and provide transparency while we do it. So our clients see our full board. They can see everything that we’re finding.

Scott Bursey (07:05)
And that clearly keeps you ahead of the competition.

Brittany Megrath (07:08)
It it definitely sets us apart. But I I to be honest with you, it’s like it’s one of those things where hmm, I can kind of tell why what we do is maybe it doesn’t look attractive from the outside to a broker because it’s a ton of work. You know, if you are a broker and you’re like, maybe I could just become an expert in my local market and yeah, you know, like you’ve got the whole deal memorized versus where we are on the niche that we’re in, like we do a ton of upfront work.

But it is very valuable. So the brokers that we are competing with that do this level of work is far and few, to be honest.

Scott Bursey (07:47)
Thank you for highlighting that further. And if you could give our listeners the play by play on this. Looking back at your growth phase, what is the one operational bottleneck that that almost slowed you down?

Brittany Megrath (07:59)
I would say it ⁓ kind of staying on that same track, the amount of research, you know, that kind of takes to get these deals done. Once we start getting more and more clients, obviously that upfront research grows, right? So we are expanding our team internally. And so we are currently interviewing new players to come join our team, ⁓ analysts, you know, really

it’s important for them to be able to talk to people. It’s also important for them to be able to have an interest and want to learn about some of these properties and not just locally but across the country. so hiring internally making sure that we’ve got the hands to be able to, you know, perform that work.

Scott Bursey (08:47)
Finding the right pieces to the puzzle. That’s so critical.

Brittany Megrath (08:51)
Mm-hmm. I’ll say AI is definitely helping ⁓ you know, make some of those processes a little bit quicker. And we hired an AI consultant, actually.

Scott Bursey (09:02)
So it’s important to acknowledge those friction points, but where do you feel your operation is firing on all cylinders currently?

Brittany Megrath (09:10)
we are filing on all cylinders currently with pretty much all of our clients. I mean, we are a developer ref, we are constantly making calls. We are growing our property database, and I’m really excited for some of the things that we’ve got in the works. but we’ve got a great system in place. Like I said, we are very high on communication, very high on transparency. You know, our clients really see

what we’re doing, how many calls we’ve put into a property, what the conversation was with the property owner, and clarity and transparency in the work that we’re doing is very important because this is the first domino for our client to put their projects to t together. If we can’t find the land, they don’t have a deal. You know, so it’s not just, you know, ⁓ you know, willy-nilly, maybe we’ll find one, maybe we won’t like

We take our work very seriously because these are it’s not just, you know, income for the company and my company. This is income for the developer and then income for the tenant. So we are really the first domino and first piece of the puzzle for like a three piece opportunity, right? For the broker, for the developer, and for the tenant.

Scott Bursey (10:26)
Without transparency you don’t have a deal. Well said. And with your footprint in fifteen states, where are you seeing the most under leveraged opportunity right now that the average investor may be missing?

Brittany Megrath (11:13)
my gosh. Scott, it is crazy out there with these with these sellers. And I honestly cannot say if there is a ⁓ market right now that is being overlooked in a way that, you know, if we looked under a curtain in the right spot that it would be cheap and all the economics would be beautiful. Because I can tell you right now that we are calling markets tertiary markets, secondary markets, primary markets, and you know, all in

you know, all across the country, all different states. And these owners all are really just twisting your arm for the price point on their property.

And it’s and it is just nuts. I mean, quarter acre with a shack on it. You know, it’s a million dollars. And they are firm. And it is it’s it’s tough. It’s really tough out there to make deals pencil and to get the development into a place where the rent makes sense for the tenant. And that’s

You know, that’s the goal, right?

Scott Bursey (12:12)
That’s a huge distinction right there. Interested to know, how are you hedging against the current market volatility in commercial real estate?

Brittany Megrath (12:21)
I think it’s ⁓ pi it’s building your pipeline, really. I mean, you know, we’re in a place where we’ve got a strong pipeline, but in this business you can you can never stop, right? Like everything is really hypothetical until it actually closes. So the goal is to just continue building your pipeline so that if one deal dies due to, you know, X circumstance or another deal dies to environmental.

You’ve always got another deal that is still in your pipeline that, you know, can keep your kind of company and your cash flow going. But I think, you know, we’re we’re in a volume business. The deals that we’re doing, you know, for the most part are not overly, you know, they’re not retirement deals. We need the pipeline. These are single tenant net lease deals. We’re typically looking at an acre to three, maybe five acres. That’s our kind of

usual property size. And so we need the volume. So we are constantly just trying to continuously create opportunities for both ourselves and our clients.

Scott Bursey (13:30)
Smart move. Protecting the downside is the only way to keep the tank full for the long haul.

Brittany Megrath (13:36)
A hundred percent. Yes. Yes.

Scott Bursey (13:38)
Hey, how do you vet your boots on the ground talent when you’re moving into a new territory?

Brittany Megrath (13:44)
Sure. a lot of it is relationship driven, a lot of it is personality and just camaraderie in general. Like because I’m confident in our team’s ability to really learn, right? I want somebody that I can work with, that I can if I’m in town, we can go and get a drink together. You know, so I’m not always looking for the smartest person or the person that has the most knowledge or the person that’s the top performing broker.

But I’m looking for people that I can have a great relationship with and we can work together for the long term. Because at the end of the day, they’re either gonna learn from me, I’m gonna learn from them. Like if they don’t have some of the knowledge in my asset class, they’ll learn it probably pretty quick just from working with me. You know, and so it’s it’s relationship, honestly. It’s it’s I’m looking for a friend.

you know, at the at the end of the day. ‘Cause that that’s what that’s what kind of guarantees longevity. And a lot of these relationships, it’s I mean, I’ve got ⁓ friends and different brokers in different markets that, you know, we started working together in their market and now they’ve got somebody that’s coming into Vegas and they want to work together. And it goes kind of back and forth. And it’s been probably eight years. We’ve kind of been, you know, little deals here and there.

meet at the ICSC show, you know, but it’s a relationship and we both respect each other’s work and, you know, it just it’s a nice, you know, slow, easy train.

Scott Bursey (15:21)
That

was well said and I couldn’t agree any more. Brittany, when you’re looking at a good size deal, what is a metric or a gut check, if you will, you use to decide if it’s truly a go that a lot of investors will overlook.

Brittany Megrath (16:19)
Of course. So a lot of the sites that we look at are driven by anchor tenants. So because our developers are building single tenant net lease deals, these are sort of the ancillary services to a traffic generator. Right. And when I say that, I mean they’re the small businesses that are gonna feed off the Walmart or they’re gonna feed off the Publix or the Kroger or the Vaughn’s.

you know, whatever that grocery store is in your market and they’re gonna pull that foot traffic over to their small business. And when I say small business though, I mean Starbucks, you know, Dutch Bros, Seven Brew, your coffees, you’ve got your chickens, your raising canes, your Chick fil A’s, you know, so they’re not mom and pop businesses, but they’re smaller than a grocery store, right? Your small free freestanding single tenant.

And so a lot of our site searches are driven around where these anchors are going. Where is a grocery store going? Where is there an existing traffic generator that’s pulling right to that retail corridor millions of people per year that then our tenants can feed off of? Though that’s probably one of the primary aspects or traits of where we’re kind of initiating our site selection process.

Scott Bursey (17:39)
that is some pure gold right there. Talk about a blueprint. That was sensationally broken down. Where would you like to see M Square Commercial in the next twelve to twenty four months, Brittany?

Brittany Megrath (17:51)
wow. well, since I’m looking for an additional team member, I’m hoping they’ll join. so we’ll have one more team member. additionally, we are getting into the educational space. so we are launching a an educational platform. come there’s a book and there’ll be an educational platform, and it’s really about introducing investors that have started in the residential space and are kind of ready to transition into.

a single tenant net lease asset and really find that passive income that they’re looking for. Because what I have found with going to these birthday parties and talking to parents and you know having kind of the small talk while your kids are in the bouncy house ⁓ is that a lot of people want to invest and the easiest path to get there is usually, hey, I’m going to buy a house, I’m going to find a tenant, he’s going to pay me rent, and it’s going to be great. The hurdle is that

Once you start, that tenant is calling you because their H VAC just broke, because their garage door won’t open, you know, and X and Y and Z. And it really is less passive than you had anticipated. And I want to get people into and sort of educate them on true passive income and educate them on what these single tenant net lease assets really do and what I’ve learned from working and sourcing deals and

putting together, helping our clients put together these single tenant net lease assets. So it’s it’s a win win at the end of the day for both ⁓ the investors that we’re educating and our clients that are really building these assets for investors to purchase at the end of the day.

Scott Bursey (19:33)
I love it. I love it. And you provided a lot of really valuable fuel for our listeners today. Is there any final thoughts, any other words of wisdom that you’d like to leave with our listeners here today, Brittany?

Brittany Megrath (19:46)
⁓ no, I think I think that the world is small. So anybody that’s getting into any business, whether it’s real estate or investing or finance or cooking, like just know that you know it’s the same people kind of doing the same things everywhere. And so I would always just recommend transparency, respect, being courteous.

Trying your best. And if you can’t and if there’s not an opportunity there, just say that too. You know, I just think being someone that people want to work with, no matter what field you’re in, is very important and it will end up creating a lot of opportunity for you at the end of the day.

Scott Bursey (20:30)
And that was some very important advice. That was outstanding. For our listeners that would like to keep this conversation moving, stay in your lane and collaborate with you, you know, on perhaps future deals, things of that nature. What’s the best way for them to plug into your pipeline and reach you directly?

Brittany Megrath (20:47)
Sure. And if you go to our website at msquarecommercial.com, we’ve got a contact and it will shoot you right through at the [email protected] email address that does go to me actually. And so I will receive any messages that you receive through that contact portal.

Scott Bursey (21:03)
Awesome, awesome. And thank you for joining us today, Brittany. This has been a absolute clinic.

Brittany Megrath (21:08)
Thanks, Scott.

Scott Bursey (21:09)
And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be filling your tanks with the lineup of elite guests, just like Brittany Megrath, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.