Zach Ellis is a Vice President in Colliers International’s Austin location. Mr. Ellis specializes in office tenant representation in the Austin MSA.
His twelve+ years of industry experience make him an expert.
So, how did you get started in real estate?
I was working as a commercial lender after college and found myself wearing a three-piece suit to sit in a cube all day with a headset on. I’m a people-person who thrives on face-to-face interaction and was seeking to do something that utilized more of my strengths. I knew a few people already in the industry, so I had some idea of what to expect, and the entrepreneurial aspect really appealed to me. I started meeting with every commercial brokerage firm in Austin and, over the course of a few months, had created a shortlist of companies who seemed to be a good fit and were interested in bringing me on. I finally landed at a local tenant representation-only firm with a great group of people. That was 2008, and was in the middle of the Great Recession, so that was an interesting time to enter the industry.
What drew you to tenant representation, specifically dealing with office type properties?
Commercial real estate as a whole interests me but, at first, I wasn’t really sure what aspect I wanted to focus on. When you are just starting out, you don’t know what you don’t know, so it’s somewhat a leap of faith. I chose to focus on Office Tenant Representation because I felt like I was actually solving a problem. The office is where people essentially spend most of their time outside of their own homes, so it has a huge material impact on any company, those who run it, and their employees. The market is very dynamic so I have the opportunity to be an expert at my job and, since no two transactions are the same, I knew it would always be engaging. I’ve enjoyed helping people one way or another my entire life and I love solving complex problems. At the end of the day, I have a tangible impact on the culture of a company and the day-to-day lives of a lot of people, which is very rewarding.
I also liked the idea of selling a service as opposed to a product. There is a finite number of commercial real estate properties or owners to represent in any given market, but seemingly an infinite number of companies to partner with around the world. I enjoy working with business owners in a collaborative way and they are typically driven and decisive, much like myself.
Could you speak a little bit about situations in which you believe prospective office tenants would require your services?
In short, office tenants need to partner with an office tenant rep broker when evaluating any commercial real estate decision. Whether that be a new office, relocation of an existing office, negotiating lease renewal terms, expanding within their building, subleasing excess space, consolidating offices, opening an office outside of Austin, or better understanding the aspects of their lease or what other tenants in their building are doing. Consulting a qualified broker costs nothing and will save a company time, so they can continue to focus on growing their business while saving on their bottom line. Some things can seem simple and routine on the exterior but underneath all of that are a lot of complicated moving parts.
In a tight and highly competitive market like Austin, it is better to be proactive than reactive. I not only want to help clients avoid pitfalls but inform them of opportunities that can be impactful in both the near-term and further down the road to facilitate smart growth. Even if a decision point is far off in the future, having a broker working on your behalf or simply thinking of your specific situation in the background is something I wouldn’t want to pass up. I take a long-term approach with my clients and love giving free advice, even if that is to stay put and do nothing. I encourage anyone that’s contemplating a commercial real estate decision—even if it seems simple—to engage a broker so that they ensure they are making an informed decision. We streamline the process and reduce a lot of headache along the way. Maybe the worst-case scenario would be confirming something they already knew, but the best case is that I can shine a light on something maybe they didn’t. There are nuances to the process and knowledge and expertise you gain only from doing it day-in and day-out and being very active in the market.
What kind of value can you bring to potential clients?
Market knowledge, expertise, industry relationships, and work ethic are all benefits I bring to my clients. These are invaluable in my industry. A tenant—a company—is looking to make a really profound decision that permeates all aspects of their company, from recruiting and employee retention to company culture and budgets. So it’s a big decision, and you want to make the best decision possible. In hiring a professional that has the appropriate expertise in a given size, product type, and even industry is really important. Beyond that, there’s a slew of technological resources and a global platform that [Colliers brings] to the table that I can use to assist any company of any size in making an important, informed decision regarding their facilities requirements. Technology is rapidly changing the industry in a way that the raw data is very accessible to users and pretty much free so “finding space” isn’t the primary job description. It is accounting for a multitude of factors and seeing how puzzle pieces fit into the bigger picture while solving an office space problem with the future in mind. We advise on far more than just office space.
What are some qualities that distinguish you from any other tenant representative?
I have been doing this for about 11 years and there’s a lot I’ve learned over that time. There really is no replacement for experience in this industry but I’ve also learned that you can never overperform or out-service a client. I aim to do more for my clients before, during, and after a transaction than anyone else, and I look forward to answering clients calls, even if just to help with the smallest of details.
I think there is a lot of noise out there regarding brokers, what we do, and who can best help tenants. And, at the end of the day, not all brokers are created equal. So you want to work with one that has comparable experience in your industry, size, and product type. If, for a given prospective tenant, all things are equal, I recommend choosing a broker you have a good rapport with and one who will deliver potential bad news as quickly as they deliver the good. You’re going to be working with them closely for months on end, so, if you don’t like the person, it’s going to make the process significantly more difficult.
Given the current market atmosphere in Austin, what are some key points of advice you have for tenants in the search for their ideal office spaces?
Austin is one of the top commercial real estate markets in the nation. The goliaths of industry are choosing to bring their headquarters, as well as their second or hundredth, office here. That makes for a very competitive marketplace and, when demand outpaces supply, starting early is key. It creates optionality, increases leverage, and allows time to determine some unknowns or react to changes along the way. Just like shopping for anything (a car, house, job, etc.), some questions are answered simply by going through the shopping process. I also suggest negotiating on several spaces in parallel so backup options are tee’d up, which also takes time.
There are many different CRE firms that perform tenant representative services in Austin. What qualities would you say distinguish Colliers from other firms?
Companies in Austin are really fortunate to have a lot of different brokerage firms to choose from.
Colliers is kind of the best of both worlds. It provides a great balance of a global real estate leader and a local shop that really cares about its clients. We have all of the resources of the other top global firms, but because of how we’re structured, we can work with all sizes of companies in Austin, in Texas, and beyond, so a company never outgrows our services. For companies on the smaller end of the spectrum, we’re able to invest time on the front and appropriate guidance so that they can potentially become one of the companies with downtown building signage in time. Their success is our success.
Where do you see the market for office tenants going in the short-term?
In the near term, since the market is so constricted, we’re going to see more and more development and redevelopment in tertiary submarkets on the horizon (the East Side is a great example). Many Tenants are tired of paying Downtown market rates and will look outside of the urban core for relief. Tenants are also looking to reduce their commute times as Austin traffic worsens while still being in close proximity to walkable amenities. Of course, The Domain in Northwest Austin (our “second downtown”) will continue to grow.
In the long-term?
In the next five years and later, I think the East Side will look completely different. It’s already well on its way, but I think that the rate at which it is developing will certainly continue in the long-term. Ten years from now, it may be very difficult to distinguish Downtown from the Eastside. We will continue to see the Far Northwest submarket grow with nicer and larger buildings you would typically expect to see closer to Downtown. And the areas South, Southeast, Southwest, as well as Kyle and Buda will see sustained growth.
Given your extensive experience dealing with office leasing, could you talk about a deal you worked on in which you really made a difference in your client’s lease search?
There really is no such thing as an easy real estate deal. Each deal has its own specific set of problems to solve, issues specific to that company. Most of the companies I work with (such as fast-growing technology companies) are looking for flexibility because they don’t know who they’re going to be in three, five, or ten years. Those are the types of terms that the market and landlords try to dictate. If those don’t sync up with the needs of a company then it’s my job to find a creative solution that works. That’s a continual struggle I deal with, but I’m able to leverage the greater client base that [Colliers] wields within the market to the benefit of a single tenant, even if they are a little bit smaller.
Creating flexibility for clients is one, but a scenario that I often work with is a client who has outgrown their office (or needs to sublease for another reason) and relocate ahead of their existing lease expiration. Identifying their next office and marrying the timelines of that lease with an incoming subtenant to take over their space can create a lot of action items to stay on top of, especially if there is construction involved. Since a single month of lost rent can be very impactful on a company that is scaling, a lot of focus goes into mapping out various real-world scenarios so that there are no surprises, and everything runs smoothly. There are a separate set of considerations when dealing with subleases and I’ve become very experienced in dealing with that scenario, which is increasingly common.
What would you consider the greatest accomplishment in your career?
I think the greatest accomplishment of my career would be a little less tangible than one specific thing. I’ve built and maintained a strong reputation for myself over the past 11 years, and that really comes from putting the client and their needs first and foremost. I think a lot of brokers see their relationship with a client as transactional in nature and, in doing so, aren’t truly listening to these companies or taking the time necessary to do it right. They are missing the opportunity to engage at a much deeper level. I take a holistic approach and strive to really understand a company and its motivators, which allows me to better address their wants/needs and build a genuine relationship along the way. One that will last well after the lease is signed. In continuing to provide value I can truly be a trusted advisor—which is my goal. That has proven to pay off over time and I’m really proud of my client base, most of which I’ve been fortunate enough to work with several times over the course of a decade.
At Tenavox, we aim to create the most personal and worry-free leasing experiences for tenants. With this in mind, could you speak a little about what you’re doing when you’re not placing office tenants in their ideal spaces?
Work really dominates my time so, when I’m not working, I want to spend as much time with my family as possible. My wife and I have a two-year-old daughter, who is probably the funniest person I know, so I can never get enough time with her, my wife, and our golden doodle. We like to spend a lot of time outdoors and are constantly seeking out the newest and best restaurants and breweries, cook gourmet meals at home, entertain friends, go to see great live music, and [participate in] all of the other fun stuff that Austin continually provides.
Based on one of the first responses you gave, you said that you started as a tenant rep right in the middle of the 2008 financial crisis. Do you feel that entering the industry at that point helped develop your skills in the commercial real estate industry? And could you talk about how that played into your development as a tenant rep?
Absolutely, that’s a great off-the-cuff question. I think entering the industry in a down market forced me to very quickly learn the industry, best practices, and just figure out how to make things work. There wasn’t an existing book of business for me to rely on, there wasn’t a pipeline of deals coming my way, so it was kind of trial-by-fire. I think that instilled in me a drive to just keep going, keep pushing, and being relentless in my pursuit. It was really formative for me and my career knowing that, at the end of the day, you have to out-hustle the competition to succeed.
You can reach Zach Ellis at his contact information below.
Zachary R. Ellis
Vice President | Austin
Direct +1 512 539 3004
Mobile +1 512 565 6674