CEO on Leadership: Mark Fornes, President, Mark Fornes Realty, Inc.
By: Ron Derven, contributing editor, Development.
Mark Fornes is president of Dayton-based Mark Fornes Realty, Inc., an entrepreneurial developer of office, flex, and warehouse buildings in the southwest Ohio market. Since the firm was founded in 1987, its principals have developed more than 2.5 million square feet of industrial and office space and managed more than 1 million square feet of commercial property. Over the past 10 years, the company has completed approximately 650 transactions totaling $360 million in value and more than 7 million square feet of space. In addition to its development and brokerage services, the firm also has a property management division and helps clients with site analysis, asset management, and investment property sales and acquisitions, as well as providing other real estate consulting services. Fornes chairs NAIOP’s Industrial Development Forum I and is a trustee of the NAIOP Research Foundation.
Development: As CEO, what are your core areas of focus?
Fornes: My role is to focus on our firm’s strategy, business relationships, and community involvement, and to interact with our key people. All of these areas of focus must be coordinated to meet and exceed our customers’ expectations.
Development: What qualities do you look for when hiring senior staff?
Fornes: Our senior staff must be focused on adapting to client needs. We like people who are customer and client focused, who have a strong work ethic, are team players, and have the ability to get things done.
Development: Apart from the data your own firm produces, what economic or market indicators do you track on a regular basis?
Fornes: I pay attention to NAIOP publications. I read The Wall Street Journal. But my best source of information comes from the members of my NAIOP National Forum. We meet regularly, at least two or three times a year, and collectively are great sources of experience, wisdom, and industry trends. We also communicate fairly regularly by email. When an issue arises, a member will send out requests for feedback from the other members. This is a great brain trust. We are blessed to have highly experienced leaders. The group’s 23 members come from various backgrounds; for example, we have executives from large, privately held companies; owners of small, privately held companies; and public company executives, with a wide cross section of talent.
Development: Over the next 18 months, what challenges/opportunities do you see for the commercial real estate industry?
Fornes: The short- and long-term challenges are the same. First and foremost, lower interest rates have helped our returns over the past several years, especially in light of the fact that rents have been flat. As interest rates rise, we will be further challenged not only to control costs, but also to increase rents. An improving economy will help to meet some of this challenge. Clearly, the economy is improving in our market area, as well as in other parts of the U.S.
On the opportunity side, there are fewer developers of buildings, particularly speculative developers. This will help our firm grow.
Development: Looking out three to five years, what do you see on the horizon that will impact the industry? What are you doing today to prepare?
Fornes: On a macro level, all business- people are challenged by the political gridlock we face at the federal level. There is, however, a point where most businesspeople simply get on with their business and move forward. There are certain things you can control and certain things you can’t. You have to be positive and forge ahead.
At some point, to get things done in Washington, D.C., both parties will have to come to the middle. Now, whether or not this will happen before the 2014 midterm election, I don’t know. My hope is that we can get back to a level of some civility in Washington and get some things done. We have to be optimistic.
Over the next three to five years, we have inventories of key land parcels in our market for development. There will always be businesses that need to expand and grow, and typically the newer, speculative buildings that we develop provide the space that will be available and ready to go when these companies need to expand. Inventorying land is one thing we have done to plan for the next three to five years, to put us ahead of the curve in terms of generating opportunities.
Development: How has the industry changed during your career?
Fornes: I came into the business 37 years ago, when I was a junior in college. The biggest change that we have seen is the information flow — the speed at which information flows, via the Internet and social networking. There is more sophistication in our business. People make faster decisions and they want things done more quickly. I think this is good.
Development: What is the most valuable lesson you’ve learned over the course of your career?
Fornes: The real key to this business is basic relationships with people, particularly clients and customers. Relationships will overcome most obstacles in the business world. If company leaders take care of their employees, their suppliers, and their customers, their businesses have a good chance of growing and prospering in any economic climate. Even though we have become more dependent on the Internet and technology in general, it is important to remember that human, face-to-face relationships drive business transactions. Knowledge of people, the ability to interact and relate to people, is still very important to getting things done in the business world.