Steve Groetsema, director of development and leasing for Bridge Development Partners, started with Bridge immediately after graduating from Illinois Wesleyan University in May 2007 (He got his foot in the door through a longtime friend at HSA Commercial). He had a great experience interning at Marcus & Millichap during summers in college, and learned that he loved the real estate industry, but that he’d like to start out on the ownership side, ideally at a smaller shop.
In an interview with Illinois Real Estate Journal, it’s clear to see that in Groetsema’s short time in the business, he’s grasped the keys to solidifying a sagacious career for many years to come. Here’s what he had to say.
In the commercial real estate business, there is always another challenge that keeps you interested and invested which, according to Groetsema, is a strong reason why he’s remained in it.
“You work on deals for so long, and you ride through so many twists and turns that are inevitable during the process, that it is exciting and gratifying to see how the puzzle eventually fits together,” he said. “I also often look back and realize what I know now compared to four- five years ago, and even one year ago.”
He continued, “I am truly excited about what is to come. I work with, and learn from, people every day that have learned more about the business than I will ever know – when you realize that you are barely getting your feet wet in the industry and are still having this much fun, you know you are in the right place.”
Besides his brother Bill, (The guy he’s emulated since he was in diapers, and still tries to copy to this day) in the industry, Groetsema also credits Bridge partners Steve Poulos, Ron Frain and Tony Pricco as mentors, with having taught him just about everything he knows, and everything that he does on a daily basis in the office.
“I don’t think there is a better deal maker in the business than Steve,” he said. “No one treats people more fairly and honestly than Ron, and Tony is so good at juggling multiple tasks but still giving each one the appropriate amount of attention and detail that they need. Outside of our team, Steve Roth at CBRE and Jeff Devine at Colliers, are two more senior guys that I have been so fortunate to work with, and lean on when needed for some guidance.”
According to Groetsema, there are probably too many lessons to list, to pinpoint just one that has impacted him working in commercial real estate. But he can say that every single day during 2009 to 2011 there was a new lesson. The amazing thing is, he’s learning as much today during a normalized to good market, as he was then during the trough.
“I would say the most valuable lesson is how to shape a deal on the front end,” he said. “That’s everything from your thesis in finding the supply hole or vacancy, to your supporting market data, to locating and securing the right capital. The deal is made on the buy side, and if I can’t support the deal to the partners in a simple single page memo or workbook, than it probably doesn’t make sense.” “I’ve learned that leverage is a tool used to enhance deal returns, not to make deal returns. And I’ve learned that it is a true relationship business, that your reputation precedes you, and that most everyone in this business has something to teach you.”
This is likely why he most enjoys the camaraderie in commercial real estate, and more specifically in industrial real estate, is really unique and fun.
“The business can be really incestuous, and you’re competing against a lot of the same people that you are having dinner with that night,” he said. “It is extremely competitive, and a rising tide truly can lift all ships – if DCT or KTR makes a great deal, it sets a good comp and can make Bridge’s life easier (other than the fact that we missed that great deal!). And if Bridge stubs their toe on a deal, it can impact our competitors and make their path difficult with that bad precedent.”
Groetsema does laundry and yard work every day because it’s so therapeutic to start, and complete, a task in a timely manner without anything going sideways during the process. That’s completely unlike the business, which he said, can definitely grind on you.
“If I am doing well, I am probably making one out of every 10 to 20 prospects that I am chasing. You definitely hear “no” more than you hear “yes”, and today most of those “yes’s” take so long that the finale can be anti-climactic. Ron Frain told me early on that this would happen, and it has.”
What sets Bridge a part from the rest? Groetsema said Bridge’s ability to be “dealmakers” is really valuable.
“We have been fortunate to have so many great capital partners, that the brokers bringing us deals know we are real, and will execute for them. At the same time, we know that real estate is a living, breathing thing and changes inevitably happen – we know going in to a deal that the one thing that WILL NOT happen is what we have modeled in our pro formas. You need to be flexible to changing deal structures and economic times, and I believe our lean, entrepreneurial hierarchy allows us to do that as well, or better than anyone.”
Last year, he said Bridge had a nice win where they purchased a +/- 25% leased, 320,000 SF building in Elgin to full stabilization, and sold the asset in twelve months.
“We recently executed a very complicated build to suit, for lease on a really difficult landsite in McCook – that is now a 15-year lease with Freeman Decorating Services on an irreplaceable infill site,” he said. “Over the last 5 years we have also worked to establish a niche in functional cold storage product near large population bases.”
He continued, “We have about one million square feet of that product in Chicagoland now, and that is product where vacancy is so minimal, and that produces deal yields that are higher than where state of the art dry industrial product is typically priced. We also have our first three buildings under construction in south Florida, with a few more in the queue, and are targeting our first deals in New Jersey. Activity and demand both from tenants and potential buyers is really exciting in those markets.”
When Groetsema isn’t working, he loves playing recreational games, specifically darts or bean bags, and he welcomes a challenge from anyone reading this. He and his wife, Suzi, can also be found renovating the home they purchased in LaGrange over a year ago.
“A lot of our time and energy have been spent there recently,” he said. “We both also have a passion for travel, and our preference is the leisurely trip with multiple good books, and daily happy hours and new restaurants. And nothing will ever beat spending time with family and friends, especially our three beautiful nieces.”
Between his wife Suzi, Tilly (the mini-Schnauzer/Poodle mix he loves playing with, that he and his wife rescued a few years back), and sports news, Groetsema is one happy man.
“My wife Suzi, who is the Public Relations Coordinator at Navy Pier, and who I began dating the same week I started at Bridge,” he said. “We went to high school together, and she was my high school sweetheart even if I wasn’t hers. Tilly loves when I am not good at my job, because our vacant buildings can tend to be private dog parks for her on weekends. Outside of work, I need to stay current on all sports news – the Bulls, Bears and Cubs, in that order, and anyone on any of my fantasy teams.”
Groetsema is a die-hard Chicago Bears and NFL fan in general, and is counting down the days until he can spend his Sundays flipping from game to game on his NFL Sunday Ticket.
“As a 9-year old, I competed in the state finals of the Punt, Pass & Kick competition at half time of a Bears game. I was also a linebacker, and team captain, during my four years at Illinois Wesleyan. Football is in my blood, and I am not sure I can make it through this winter if the Bears haven’t fixed that run defense.”
I think it’s safe to say that goes for all die-hard Bears fans Groetsema!