Commercial real estate duo zeroes in on multifamily properties
Ted Krez (left) and Rick Wilde hope to stand atop Madison’s large-apartment real estate scene.
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A couple of years ago when Rick Wilde, 39, and Ted Krez, 37, first joined Colliers International, the commercial real estate market was changing.
“An owner might have had a strip center they built in 2000 with really high rent,” Krez explained. “Then the economy became depressed, tenants couldn’t afford the high rents, and instead of renegotiating rent, some owners let buildings that were in their own LLCs default.” That, he said, opened up the commercial real estate market as money started coming back to secure some of those properties.
One area in particular — the multifamily asset class (large apartment buildings with 25 or more units) — remained fairly stable despite the challenging economic climate.
Seeing an opportunity, Wilde and Krez decided to form their own company to specifically target the acquisition and disposition of income-producing real estate with an emphasis on that multifamily asset class. They launched Breakwater Commercial, LLC on Aug. 15.
While commercial real estate firms often handle everything from strip malls and shopping centers to small tenants — and some do tenant representation as well — Breakwater Commercial is taking a “hyper-focused” approach.
“How can people specialize in everything?” asked Krez. “We don’t think you can. We feel it’s important to keep information secure. There will be people we work with who will ask us to find potential clients for them and want to keep it quiet.”
The duo has been establishing relationships with regional and national investors who recognize the strength and soundness of the Madison market and are looking to allocate funds in return for healthy returns on their investments.
They’ve been helped by Madison’s low unemployment rate and an uptick in rental rates, which they say has buying and equity groups looking to invest in the capital city again. “This marketplace is really exciting,” noted Krez.
“Some speculate that another 2,000 [apartment] units will be developed within a 10-minute walk of downtown,” Wilde added. “Those are definitely commercial-grade projects, and it takes a unique understanding to work in that class. Analyzing the income and running up the performance of that sector is a lot different than analyzing the cash flow of an office building.”