Daniel Butts, President, LQ Commercial
Daniel Butts, president of LQ Commercial, sat down with Invest: to discuss trends in the commercial real estate sector, how the firm builds and maintains successful client relationships, and from a recruiting standpoint, how it has successfully grown organically in the region and the state.
What have been LQ Commercial’s most significant achievements for the Greater Orlando region in the past year?
Our company has continued its growth trajectory and made significant moves in the last calendar year. I’m honored to be here as the company’s inaugural president to help usher in growth, and that’s done in two primary ways. The first is recruiting new talent through producers in the brokerage space. We’ve continued to remain strong in commercial real estate, primarily in the retail space. Our company was built upon a robust retail tenant representation practice that has flourished and allowed us to expand throughout the state. A project we completed last year was leasing the Sunset Walk component of the Margaritaville Resort in Central Florida. In the last year, we established a new division for our company called AYS, which stands for At Your Service. We’ve created the facilities maintenance division. We’ve long had the property management division, where we’ve served our clients with their commercial assets.
How has the company adapted to the continuing demand for mixed-use projects with stronger commercial and retail aspects incorporated into them?
We’ve been happy to work on several of these projects and we’re seeing an increased need for mixed-use projects. Consumers want less of a commute when they’re going to work and to be able to do many things once they get in their mode of transportation. Once they arrive at their destination, they can accomplish numerous things within the same visit. We find that increasingly mixed-use components are becoming more the norm than the exception in today’s economy. The clients we work with realize that it not only meets the consumers’ demand but also makes them more financially successful based on the economies of those different uses. It diversifies the tenant mix, which is another way to hedge against one particular sector performing better or worse than others.
What is LQ’s role and experience with the many co-working spaces in Orlando?
We’ve seen a steady increase, particularly since COVID of the co-working spaces. It has significant relevance to our clients, we’ve enjoyed exploring those anytime we’re looking to place a tenant or lease up space for a client again. Companies have also shifted how they accommodate their employee mix. Many of these employees are independent contractors and don’t have offices to go to, so the co-working spaces allow them to have all of the amenities they would typically have in a traditional office space. We’re seeing more of them being utilized by large corporations. Instead of opening up a new regional office for employees, they may cooperate with some collaborative or co-working spaces as they enter a new market. It’s more cost-effective, but it also caters to the changing needs and desires of the employee base. Investors are becoming increasingly concerned with hedging their bets, and if they build new, they want to ensure that the new facility can be adaptive. Single-use is becoming a dying breed in commercial space.
What is LQ Commercial tracking on the legislative or regulatory agenda?
It’s no surprise that insurance rates are high and continue to increase in Florida. It’s challenging for many people to get insurance in Florida. But legislation has tried to force the hand of insurance companies to make insurance more achievable and accessible to the consumer. Hopefully, that will bring some of the costs down and enable more investors to get into the space that might have had difficulty accessing proper insurance historically. Also, regarding taxation, we’re pleased that the business rent tax we’re seeing this year has been about 4.5% and will drop down to as low as 2%.
How is LQ Commercial taking steps toward sustainability, and how is the commercial real estate industry embracing that?
On the regulatory front, as there are regulations relating to sustainable materials and sustainable processes, we want to advise our clients to ensure they are always compliant with those regulations and find successful ways to navigate them. Clients are taking a proactive approach towards sustainability, partly because either the employees, the tenants, or the operators and those properties demand it. However, it’s become much more of a norm and hopefully less of an investment impediment. We also want to look for ways for our clients to find incentives. We are pushing the envelope and being thought leaders on that front. The younger workforce has a much stronger mindset towards sustainability. This is why they want to live, work, and play in one location. That walkability is huge for them, their lifestyle, and their health, and it also has to do with sustainability.
What community initiatives or philanthropic efforts is the company involved in?
As a company, we are all about people. At the same time, transactions pay the bills; we find that relationships with our clients, our coworkers, and even our friendly competitors are paramount to being a successful organization. People generally do business with people that they like because of how you treat them and because of what your value systems are. We encourage all our employees, whether W2 employees or 1099 contractors, to reflect the company culture positively and remain involved in their communities. No. 1, we encourage our associates to volunteer or invest their time in things that interest them because if something interests you, you will be passionate about it. If clients see an organization in the community doing good and giving back authentically, they realize that it says more about the person and what drives them. That’s just another extension of the culture that we adopt here at LQ, which is that it’s more than the transaction. It is about investing in your communities and giving back through your talents and passion.
How does the company build and maintain strong client relationships?
The foundation for our firm, which was formed 20 years ago in Southwest Florida, was a large portfolio of active retail tenant representation, which remains a powerful part of us. We’ve become much more diverse over the years by serving several clients through and under several sectors of the commercial real estate space. However, retailers are still a powerful component, and that has been built primarily through solid relationships. We’re fortunate to have attracted a talent pool here and continue to do so. We have strong relationships with these large retail companies’ real estate directors or other decision-makers. As a result, we’ve been able to prove that we know the markets that we’re in, we’ve gotten to know these tenants, these retailers understanding their needs, and we’ve been able to connect them with the projects, the landlords, the developers, whatever those commercial real estate opportunities are that facilitate the growth of their companies throughout the state of Florida. We provide advice beyond the transaction, and we connect with people. Sometimes, we’ll connect our clients to other competitors if we believe that that competitor can better serve them and that in and of itself expands our relationships throughout the industry.
What are the company’s top priorities and goals for the Greater Orlando region for the next two to three years?
Continued growth is a big goal for our firm because we are a successful statewide firm with an entrepreneurial spirit. Growth is all about attracting talent, primarily through producers. A big part of my role is to expand my relationships throughout the state brokerage community, finding folks who may be at a point in their career where they’re looking for something new or different. Some of the larger commercial real estate firms have a fair degree of disruption nationally, but also here in Florida, where we’re trying to capitalize on that disruption and find capable, experienced producers who may not necessarily be content with the culture of their current firm. If we recruit right and get the right people to bring in more interesting and active clients, we’re just going to grow organically as a result, and we’ll keep our finger on the pulse of the changes we see around us.
