The case for — and against — carving out a niche in real estate
Turning local knowledge into a commercial advantage
Markowitz began working in the shoe business but decided it wasn’t for him, and he wanted to get into real estate. But rather than residential, he thought, “Why not do what I already know, which is retail and commercial?”
He said he began not just with a commercial niche, but also the niche of footwear and luxury retail, as well as focusing just on Yorkville. Because of his familiarity with the neighbourhood, he said he had a great head start when beginning his real estate career since he already knew all the business owners.
“I find especially in commercial real estate, the brokers who focus on one thing do the best,” Markowitz said. “You need to be an expert in something…. It’s been a huge part of my success.”
Scaling niches without losing focus
Since starting his business about 20 years ago, Markowitz has expanded to other parts of the city, but still does so with niches in mind. Now, he has each team member from his business, the Toronto Urban Retail Team, focus on specific neighbourhoods. He makes sure they master one area before moving on to another.
Markowitz has realized the value in limiting focus to a specific area, where streets can be very nuanced and can change dramatically between just a few stores. He recommends picking a specific type of commercial realty, then drilling it down further to a specific area to really know your stuff.
The trade-offs of commercial real estate
He urges his team members to establish some foothold in the neighbourhood they’re working in, be it living there, or going to a gym or restaurants there. Then you can network, and from there, it snowballs.
Still, Markowitz says it can take a long time to get rolling in commercial real estate, up to five years, compared to residential. That’s because the market pool is smaller — everyone needs a home, whereas he estimates only 10 to 20 percent of people run or lease businesses.
Deals are also more complex, often involving accountants and lawyers, and there’s a higher likelihood they could fall through than residential real estate deals. However, commercial real estate allows you to work weekdays rather than nights and weekends, and the payouts can be larger.
When asked what he likes about commercial real estate, Markowitz said: “The money… what else?”