It pays to be real serious about real estate.
Take Michael Isaacs, for example--a senior vice president at Irvine, Calif.-based Sullivan Curtis Monroe Insurance Services. He heads up a booming real-estate practice at the firm, one of the largest privately held insurance agencies in Southern California.
2007 was a good year for Isaacs. He was named a Risk & Insurance® Power Broker in the real-estate sector. And based upon his success, he was offered the chance to become a part-owner in the firm. Some might say the honor was especially significant considering he has been with the company for 10 years, the last six of which were focused on real estate.
A decade might seem brief, but Isaacs noted the state of the industry now is quite different than it was when he began with Sullivan Curtis Monroe.
"The way that carriers are approaching business has changed significantly," he said. "It used to be that carriers would look at insuring a risk for many, many years, and now that's more the exception to the rule than the norm."
What's normal now, Isaacs said, is carriers fighting for clients and lowering prices and clients hopping from carrier to carrier. That constant change is due to soft market cycles that are much longer than they ever have been.
Soft can mean hard--in terms of soft markets being more challenging for brokers, he said. Brokers need to bring additional value to the transaction if they want to justify their existence and, ultimately, survive.
"Especially in the world of real estate, you can't survive just by bringing the lowest number to the table," said Isaacs. "There are a lot of other intangibles that are important to delivering a longer-term relationship with a client because it has become so competitive."
In a sector like real estate, expertise and knowledge of the client's business is critical for success. Anything that can prove this to the client will instill confidence and trust in the broker. According to Isaacs, he's got a bit of advantage here, and the theory is simple.
"All I'm focused on is learning and understanding the real-estate industry," he said. "I'm in the real-estate business. I'm not in any other business. I'm focused only on this."
He's taken that focus even further, becoming a member of the International Council of Shopping Centers, a 65,000-member retail real-estate trade association, as well as a member of the National Association of Industrial and Office Properties, a North American association for developers and owners of commercial real estate.
"I think it adds credibility more than anything else, that you're moving in the same circles with the people that are in the industry," Isaacs said. "If they see you and recognize you there, you have an advantage. By getting involved, people get to know who you are."
Recognition is important when the name of your firm isn't Marsh or Aon. Sullivan Curtis Monroe's real-estate practice serves office, retail, industrial and residential sectors. The firm's clients, developers of all those asset classes, are typically headquartered in California but have properties spanning the country.
One focus area, of course, is Florida and Gulf properties. Isaacs said he has clients who are continuing to purchase in coastal areas, where wind coverage is difficult to come by, but they feel CAT rates are so low and competitive that the deals are too good to pass up.
"A lot of clients are buying in Florida and other parts of the country just simply due to the fact that there has been such a depression in CAT rates within the real-estate market," he said. "Depending on where it's located, wind is always going to be a challenge for clients of any asset to buy in a CAT area."
In addition to advising clients in a risk management capacity, Isaacs also shares his expertise with insurance companies. For the last three years, he has served on the National Advisory Council for Liberty Mutual Property Group. The position involves providing feedback about how the company's products, programs and services can achieve the results that the carrier?and brokers?are looking for.
And when a broker works so hard to amass the volumes of expertise and knowledge as Isaacs has, it must be nice to be asked for advice.
Admits the Power Broker, "It is a lot of fun."
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September 1, 2007
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