Growing Apartment Brokerage Wants Another 20

By: Randall Turk

Transcript Business Editor

In early 1985, Mike Buehl was barely 20 but had already been with two real estate brokerages that shut down their offices.

“I decided to go into business for myself,” he said. He partnered with developer Tom Gray to form Commercial Realty Resources Co. in Norman. Initially, the company specialized in restaurant tracts. The following year, the company shifted brokering apartment properties and providing marketing services for apartment buyers and sellers.

Over the past 20 years, CRRC has been involved in listing and selling some 13,00 apartment units for more than $250 million.

Buehl said Gray, who developed Prairie Creek housing addition at I-35 and Rock Creek Road and helped develop the Sheraton/Holiday Inn Hotel in Norman, also was involved in multi-family property development in Norman and Oklahoma City. “He hooked me up with people he knew in the business.”

In 1987 the company sold its first apartment complex, the 160-unit Lakeshore Ridge Apartments in Oklahoma City, for$1.7 million. That was soon followed by the first Norman property sold, the Cedars, for $1.15 million.

Although CRRC has expanded operations to include Tulsa and Fort Smith, Beuhl said he and Gray decided to keep the company headquarters in Norman because both live here.

“We love the college atmosphere and OU games,” he said.

The Norman apartment market began to heat up in 2000. “We’re now seeing a lot of student housing built in Norman. Another big trend is the large number of California, Dallas and Houston buyers. Probably 80 percent of apartment purchases in the last two years have been by California buyers. It’s a perplexing trend because rents are not as high here.”

The Norman apartment markets bound to cycle, and when that occurs “the next trend will probably be what these California buyers do with their properties, Buehl.

He said California owners are more concerned with return from property value appreciation, while local owners look for cash flow. “California owners perceive they can raise rents, but they can’t do much of that. Hey want 12 to 13 percent increases, but have to settle for 7 or 8 percent.

Buehl said CRRC emphasizes listing properties and providing services. “We do a lot of broker’s opinion of values for owners and lenders. The company provides a Web site, a data bas, and marketing planning and reporting.

In early 2002 CRRC added Aaron Hargrove as a partner for the Tulsa market. Early this year the company opened a regional office in Fort Smith. “Long term, we’d like to look at other markets like Kansas City and Omaha, but probably not Texas,” Buehl said.

CRRC presently has 1,273 apartment units in the metro area and 500 in Tulsa under contract. In Fort Smith, the company has contracted for the sale of 72-unit apartment complex.

The company’s largest sale, for Equity Residential of Chicago, was a package of five apartments properties in Oklahoma City: 1,657 units that sold for $49.8 million.

In Norman CRRC sold Savannah Landing, a 56-unit complex on Hall Muldrow Drive for $1.5 million in November. But Buehl sees sales slowing here because of the approximately 1,200 student apartment units being added to the market. The market is saturated,” he said. Filling the new apartment and bolstering occupancy rates in Norman’s 9,800 existing units “will probably take a year.”

The first few students housing complexes such as Campus Lodge, on Biloxi, But The Reserve at Stinson, south of OU duck pond and Crimson Park, off Classen, also will be competing with the University of Oklahoma’s 40 units of student housing neat the ballpark on south campus, Buehl said. The university also plans to demolish and rebuild the old Yorkshire Apartments near Noble Center. “We’ve seen the same situation at Oklahoma State University. It created a lot of softness in the market.”

Builders remain optimistic to drive their projects, “but adding product eventually creates oversupply,” Buehl said.

A significant aspect of CRRC business is analyzing apartment properties’ expenses, maintenance and potential return on investment. The metro apartment market has seen its ups and owns over the past 20 years, but Buehl remains optimistic.

“It’s been a great 20-year run, he said. “I hope we’re around another 20.”

For Buehl, now 40, the prospect for that looks very good.