The country’s first dedicated commercial buyers’ agency is eyeing expansion in the next year or two.
When Tas Costi and business partner Simon Cohen decided to launch the country’s first-ever dedicated commercial real estate buyers’ agency in 2021, they knew they had their work cut out for them.
First, they were launching in the middle of the Covid-19 pandemic, and secondly, their product had no existing market – they had to create it.
Four years on, the Costi Cohen buyers’ agency has closed nearly $2bn of deals, 80% of which were done off-market. On average, the agents were able to save their clients around 12%.
In the last two months alone, the agency has exchanged over $130m worth of
properties. The company has become the one of the most sought-after commercial buyers’
agencies by wealthy investors, family offices, institutional investors, developers and mum-and-dad buyers, giving Costi Cohen unique insights into the commercial market landscape.
Tas Costi, co-founder and managing director of Costi Cohen, spoke with Green Street News about what’s really happening on the coalface of the country’s commercial property market.
He also revealed the secrets to the buyers’ agency’s success, how they’re sourcing deals in a competitive market and how they’re catering to the burgeoning demand for their services.
How did Costi Cohen start?
I initially cut my teeth in commercial construction and property development before moving into commercial real estate. That’s where I started buying sites for residential developments, boarding houses and childcare, which I was doing privately. No one was doing the job we do now. It didn’t exist.
I met Simon Cohen, and I pitched him the concept of starting a commercial buyers’ agency. He loved it.
We saw a gap in the market for high-performance, client-first approach, so we launched Costi Cohen, Australia’s first dedicated commercial buyers’ agency.
What was it like launching a product that has no existing market base?
The first year was tough. I think the second year was a bit easier. In our third year, the business just went crazy. It was unbelievable. The amount of deals we closed that year, most agents won’t achieve them in their careers.
Once we were able to figure out how things worked, how we could control our clients, how we could find the best deals, present those deals, and how we communicated, we were able to create a process.
In the beginning, we did everything and said yes to everything, in order to service clients. But I think because we exposed ourselves to every asset class from the very beginning, it helped us gain expertise in those markets.
Right now, we’ve got data and research in-house and our agents get to specialise on a particular asset class or strategy such as buying an investment property or development site.
What was the most challenging part of starting up?
When we first started, the biggest challenge was educating the market and building trust with agents and property owners so we could gain greater access to quality deals, especially off-market opportunities.
In commercial real estate, relationships and reputation are everything. Early on, we had to prove that we could execute quickly, negotiate effectively, and deliver the right buyers.
Over time, those relationships have become one of our strongest advantages, allowing us to access premium stock well before it reaches the open market.
Are you planning to expand Costi Cohen?
We’re definitely growing and servicing clients across the country from Sydney, but the intention in the next 12 to 24 months is to have representation across the country.
We’re getting approached by a lot of commercial buyers’ agents wanting to work with us. But we’re selective when it comes to people who works with us to protect our reputation and credibility. So it’s not about having the biggest business, but being able to deliver premium service.
How hard (or easy) is it to find deals at the moment?
It’s not easy at all. It’s about having the relationships that you can leverage to
find those off-market deals.
We’re getting a lot of calls from owners and agents about off-market deals, but we’re still chasing deals everyday. If you want to have the most access, you need to be front of mind in that market, wherever you’re trading.
How has the commercial property market changed since you launched?
When I started, yields were higher, and there was less competition from private investors. Commercial property was largely dominated by institutions and seasoned operators.
Development sites in particular were often sold to a small, tightly connected group of buyers who seemed to control much of the market.
In recent years, low interest rates and the search for income-producing assets have brought in a new wave of private buyers including residential investors “graduating” to commercial.
Today, we’re also seeing more sophistication in buyers’ requirements. Investors want not just income, but strategic asset selection, tenant quality, and future proofing against market changes. The bar has been raised.
Which sectors are leading the charge, and which ones are lagging the most at the moment?
I would say retail is quite hot right now, but there’s not a lot of transactions happening because everyone’s holding them.
Fast food assets, fuel, essential services driven by necessity-based spending are in high demand. Retail and shopping centres, particularly those anchored by supermarkets and strong-performing national tenants are also highly sought after.
(Source Green Street News)
We’re also seeing strong demand for logistics and warehousing as well as childcare, which is underpinned by strong government support and demographic trends.
We’re doing a lot of healthcare property deals at the moment because banks love them as they are typically underwritten by doctors and have very long term tenants, which is very appealing for investors.
On the flipside, we’re seeing secondary office assets are still lagging, impacted by hybrid work and rising incentives. Low-grade retail is also slow unless it’s necessity-based or strategically located.
Who’s actively buying at the moment and what are they looking for?
We’re seeing high-net-worth individuals, family offices and an increasing number of seasoned residential investors making their first commercial acquisition. We’re also seeing more developers coming to us for their first commercial investment.
These buyers are targeting assets that have long leases to strong national or multi-national tenants.
They want WALEs of five to 10 years or longer, yields in the 5% to 7% range and assets that are located in areas with strong growth fundamentals.
How would you describe the commercial property market right now?
I think the negative sentiment overall is slowly diminishing. I don’t think there’s any asset class in the market that’s really struggling.
If you asked me 12 months ago, I would have said the office market because of high vacancies, but now all signs are pointing to a gradual recovery in that sector.