By Meghan Hall
The Bay Area’s dynamic and rapidly growing commercial real estate industry has given rise to a diverse variety of brokerage firms that include small mom and pop operations all the way up to global firms like CBRE, Cushman and Wakefield, among others. TRI Commercial, a regional firm that has called the Bay Area home for the past 40-plus years, sits in the middle, and in the midst of COVID-19 and economic uncertainty the firm is looking to do what some may peg as unusual during a market correction: expand. In May, TRI Commercial hired long-time broker Joshua Gispan and announced their plans to open a new San Jose/Silicon Valley office to grow their regional presence.
Prior to making the jump to TRI Commercial, Gispan worked at Meacham Oppenheimer for almost 27 years. At TRI, he will not only lead the development of the firm’s Silicon Valley office, but will act as Silicon Valley Sales Manager and Senior Vice President of Retail and Investment. Gispans first introduction to TRI came more than a decade ago through CORFAC International, an organization of privately-held entrepreneurial firms specializing in the commercial real estate sector.
“About ten years ago, Meacham became a CORFAC affiliate for Silicon Valley, and that was my first introduction to the guys at TRI,” explained Gispan. “We did a number of transactions with some of their brokers in San Francisco and other offices…it was a good feeling. When COVID-19 hit, I was then asked by Tom Martindale to sit down and speak to them about opening a Silicon Valley office, which I knew was one of their goals to fulfill the circle of the Bay with their San Francisco, Oakland and Walnut Creek offices. San Jose/Silicon Valley was just a natural progression.”
Established in 1977, TRI Commercial has more than 150 brokers and staff across its five Bay Area offices. In 2019, its leadership launched a recruitment campaign to grow its footprint, increasing its staff by more than 25 percent in six months. To date, the brokerage and property management firm has more than four million square feet of commercial property under its management.
While the expansion into Silicon Valley, Gispan emphasized that TRI is committed to making it work and making sure that the office’s new brokers are well supported. TRI hopes to have at least five brokers by the end of the year, and grow to upwards of 20 brokers to cover all specialty groups.
“Our goal is to try to recruit the best possible people that we want to work with, the ones that will fit into our culture,” said Gispan. “…I think it’s going to be a culture that we can envsision and implement, where the brokers feel comfortable. TRI has a very good network of staff.”
Additionally, stated Gispan, there is opportunity for growth in the Bay Area commercial real estate sector, due to the variety of businesses that call the region home. Different clients and investors will select different brokerage firms based on their own, and that TRI mirrors its clientele, serving mid-tier regional businesses throughout the area as opposed to global corporate clients serviced by the Colliers and CBREs of the world.
TRI is also different in that as a firm, it runs a lean staff and management on purpose, and without any debt, brokers are able to garner more competitive splits. For Gispan and those at TRI, the brokerage firm sits in a “perfect middle” and is somewhat of a Goldie Locks: large enough to be stable and maintain an established presence, but small enough to avoid corporate red tape and bogged-down business processes.
The uncertainty of the market also gives TRI the opportunity to recruit brokers who might otherwise be unattainable.
“What we have working for us is the Wall Street consolidation of a lot of the larger firms, which basically gives us an opportunity to get some very experienced brokers to come over to our platform who would not normally be available,” said Gispan. “Right now, we have an opportunity because big firms are laying off staff or cutting splits, or brokers are just not happy with where they are at.”
As TRI works to establish itself in Silicon Valley, Gispan—and the industry at large—is keeping a close eye on the submarket’s commercial real estate. While certain asset classes, like retail, are struggling, while industrial seems to be faring better.
“For retail, this is one of the first times in history that tenants are in the drivers’ seat,” said Gispan. “Previously, landlords had numerous tenants that they could backfill spaces with should a tenant move out or ask for any concessions. Now that available list of tenants is virtually non-existent.”
Gispan acknowledged the landlords across all product types don’t want to just give in to all concessions, but they are becoming more pliable in an effort to hold on to existing leases. Ultimately though, Gispan believes that the Silicon Valley market will bounce back.
“Silicon Valley is a powerhouse of the country,” said Gispan. “We have gone through many cycles of boom and bust, and every time there is a bust, the boom that follows seems to be much greater and stronger.”