Al Mirin
Executive Director, Cushman & Wakefield
Age: 51
Industry experience: 30 years
Al Mirin started out in the real estate industry as a financial analyst, advising investment and leasing brokers on the fundamentals of their pending deals. A downturn in the economy prompted a career shift, as transaction activity slowed to a trickle during the recession of the early 1990s. Mirin made the jump to leasing brokerage before branching out into investment sales, where he advised more than $8 billion worth of transactions. He and his team made the move from CBRE to Cushman & Wakefield’s Stamford office in 2010.
Q: What’s the most sought-after category for investment sales in 2018?
A: Multifamily is still very hot, medical is very hot and retail obviously has cooled off with all the development that has happened. Office has to be very high quality and for the most part, it’s got to be 85 to 90 percent leased to make sense as an investment. We’ve got 30 deals on the market and it’s a good cross-section of those including development. There’s much more capital than there is product and it’s patient capital. People aren’t going to go crazy and buy a deal because they have money. They are being very selective.
Q: What’s the price range that institutional investors are looking to buy for office sales?
A: Institutional by definition is probably $35 million and up, but there are a number of institutions that are willing to do deals in the $20 million to $25 million range because the yields in the suburbs are better than New York City. You can buy it here at 6 percent so it looks much better.
Q: How big of a price premium are you seeing for transit-oriented office properties?
A: At least 20, maybe 25 percent. You’re getting 25 percent more rent and 25 percent more money on the sale. We’re marketing a property in Westport which is close to the train and that’s 84,000 square feet which is fully leased to institutional tenants. We’re getting cap rates far in excess of what we could get in a suburban-type market.
Q: What seems to be investors’ sentiment on retail acquisitions and are they looking at more properties as redevelopment opportunities?
A: It used to be if you had a retail center and two publicly-traded companies (as tenants), you’d get a premium. Now they are just as happy either way, because the publicly-traded companies aren’t any better from a credit standpoint. We haven’t seen a ton (of conversions) because we don’t have a ton of vacancy. We don’t have big boxes, and the closest Sears is in Danbury. But from a macro perspective, the no-brainer is to go to medical, because you’ve got the parking. The problem with those big boxes is they’re big, they’re dark, and you’ve got to figure out a way to make it better. Every retailer has a smaller concept (store). You don’t hear the term “superstore” very much anymore.
Q: In the wake of the state’s recent inventive deals with companies such as Sema4, ITV and Wheelhouse in Stamford, will there be office rent recovery?
A: In Stamford the multiplier effect is going to be amazing. Stamford’s population has been going up for 10 years whereas the rest of the state has been stagnant. People are still moving in because it’s becoming a 24-7 environment, with lots of restaurants and a short walk to the train. The employers are saying, “Maybe we should locate there,” which is great. That’s going to continue and keep the apartments full. As far as office vacancies, there’s still some pretty big holes to fill, but this is a great start. Stamford has been growing for years. It used to be you moved out to the suburbs when you wanted to start a family. Now people want transit-oriented development whether you work in the city or not.
Q: How are e-commerce companies satisfying the demand for last-mile distribution space in Fairfield County?
A: Since I’ve been here, the industrial base has shrunk by 30 percent and was converted into retail or housing or something else. If you’re on I-95, you’re going to go outside the band of traffic to Stratford. If you’re going south and want to service Greenwich or Westchester, you’re seeing a boom in the Bronx. The key is to build a warehouse that’s not functionally obsolete. Most of the industrial in Connecticut was manufacturing. There’s 14-foot ceilings and people want 30-foot ceilings. At the end of the day, the FIRE (finance, insurance and real estate) sector is really what drives this market. And you’ve got entertainment on top of that.
Q: How busy a year for investment sales has it been so far?
A: From a workload perspective we typically carry 30 deals all the time, including development. We weight them depending on the market. You’re seeing a lot of assisted living. Those are purpose-built so they’re either demolishing what’s there or finding land. You can’t convert an office building to assisted living. We’re seeing a lot of owner-occupiers in the office and retail market. 1031 exchanges are still popular, and that’s kind of a cycle in and of itself.
Mirin’s Five Favorite Novelists:
- Michael Chrichton
- Brad Meltzer
- Steve Berry
- Michael Connelly
- Harlen Coben
