You’ve followed in your dad Tom Rankin’s footsteps to work in real estate. What drew you in personally? Was there a moment you knew the industry was for you?
I get that question a lot. There’s not really one defining moment. I just grew up around it. My dad’s been at this a long time, and he’d take me to showings occasionally and constantly talked the business with our family. I got a deep understanding of it. In high school is when I really decided to jump in headfirst as soon as I got out of college. I’ve always had interest in and love the idea of buying and selling and helping people get their commercial property.
Your bio says you first got your license when you were 18 years old. That’s really young.
Yeah, you’ve got to be 18 in the state of Missouri to get your real estate license. In my junior year of high school, that was a goal, to be one of the youngest in the state to get a real estate license. I don’t know if I was, but I had to be pretty close because I got it shortly after I turned 18. I’m 22 now. I graduated from Drury [University] last May, and as soon as I did, I went into the business as my own adviser.
What trends have you noticed so far? Do you have any dashboard stats you track?
The industrial market has been one of the most sought-after and lowest inventory. Really, there is no industrial inventory for sale or lease in our market right now, from 2,000 square feet up to 100,000 square feet. That has probably pushed several people out of our market because they can’t find space – in Springfield, Nixa, Republic, it doesn’t matter. All the good buildings are usually bought off market before they touch our syndication market services. I think the purchasing of off-market properties, there’s always been that, but from an owner and investor standpoint, they’re looking to us as brokers to dig in and find buildings that haven’t touched the market. Properties that are never reaching the public – we’re really seeing that shift from our clients to find that off-market gold, if you will.
A Forbes report on trends for 2022 says, “Offices will change, but they won’t shutter.” What’s your take?
I do quite a bit of office leasing. There isn’t as big a need for office space. There’s still a need – there always will be – but it is changing. We’re seeing a lot of these bigger companies that had large executive office suites, 5,000-10,000 square feet; they’ve sent people to work from home. They like that. Now, these larger companies are only looking for an office large enough to house all their executives and maybe a conference room. We’re seeing a lot of downsizing in offices now, maybe 3,000 or 4,000 [square feet]. We’re not leasing a lot of large offices now. That’s resulted in a lot of smaller office space that wasn’t as desirable is now flying off the shelves. Whether it’s a large company or a business just starting out, they’re all competing for that same amount of space. In our market, that 1,000-4,000-square-foot range is really hot.
What’s the biggest void and development opportunity in the market?
Mostly industrial – that’s the biggest need. We also have Rankin Development, and we primarily focus on industrial development, larger projects, 50,000- and 100,000-square-foot facilities. As demand has been so high for these buildings and inventory has been so low, we’ve tried to pencil out deals to fill that void. It’s kind of an interesting time, because construction prices have been so high and we have higher interest rates in effect. You got to look at the development from two ways: What’s it going to cost to build? And what can you lease it for? We’ve had prices between $4 and $5 a foot for industrial space, and now all that inventory is gone, leased. Those prices are beginning to rise. We’re going into unprecedented times. Is the demand so great a tenant is willing to pay $6, $7, $8 a foot on these new buildings? That’s what it’s going to take to get more inventory on the market. That’s the million-dollar question every developer is asking: Can I actually get these higher lease rates and pencil a deal? I don’t think a lot of people are taking that gamble yet. We think people will pay that because they have nowhere to go.
What’s the biggest thing you’ve learned from your dad in the business?
He may not know he taught me this – but that every relationship that you create and come into contact with, it’s important to take each transaction, person with respect and give them the best value we possibly can. Provide sound advice to them, whether we’re going to get a paycheck at the end of the day or not. Keeping a good reputation in this business is one of the highest values we hold.
With interest rates rising, are buyers and developers backing off deals?
That’s been a big talk of the town. As the Fed has stated, they’ll be increasing those rates. I think it’s going to start slowing the market down a little bit. When you factor in the construction costs increasing paired with inflation and these high interest rates – and are we going into a recession? We’re all in limbo to see what’s going to happen in the economy. I think it’s going to slow down the deal flow a little bit. But at the end of the day, people are always going to be doing deals but maybe a little more creatively. That might take some restructuring from a buyer’s and developer’s standpoint. Some of these interest rates are going to 5%-6%.
Jack Rankin can be reached at firstname.lastname@example.org
Mercy Springfield Communities is replacing its Mercy Clinic Family Medicine – South Creek building, located at 2711 S. Meadowbrook Ave., with a new building that is 1,500 square feet larger.