The latest episode of the AZ Big Podcast with Michael & Amy has officially dropped. Episode 11 guest Rising real estate star Casey Blais from Burch & Cracchiolo stops by to talk about focusing his practice on real estate, the intricacies of zoning work, the outlook for the Arizona Market, and more!
Listen to more of the AZ Big Podcast here.
Podcast Transcript:
Michael Gossie
Welcome to the AZ Big Podcast sponsored by Burch and Cracchiolo. I'm Michael Gossie, editor-in-chief at AZ Big Media, and I'm joined by my co-host, publisher Amy Lindsey. Today we are joined in the studio by Casey Blais from Burch and Cracchiolo. Welcome, Casey.
Casey Blais
Hi, thank you. Thanks for having me.
Amy Lindsey
Casey, thanks for joining us. Can you start by telling us a little bit about your background at the legal practice of Burch & Cracchiolo?
Casey Blais
Sure, I've been at Burch and Cracchiolo my entire legal career. I came to ASU for law school and was hired on as a law clerk and started there. In fact, that's true of many of the attorneys at Burch and Cracchiolo. Andy Abraham as a law clerk that stayed the entire time. So, great place to work. I really enjoy it.
Michael Gossie
Why did you decide to focus your practice on real estate?
Casey Blais
So, I had a friend in Law School, who's a little bit older, Denny Barney.
Michael Gossie
Oh yeah, he's the CEO of East Valley Partnership.
Casey Blais
Exactly yeah, Danny and I were in a study group with a couple of other people and he recommended that I focus on Real Estate and Zoning work. So, I reached out to several zoning attorneys. Ed Bull was on the top of my list and ended up getting a job then. So, I started doing some zoning work and then immediately, this is in 2008-2009, the market turned. And so I ended up switching over into real estate litigation, and that's where I've been since.
Michael Gossie
I know you've been named a Rising Star for almost a decade or however many years you can be named a Rising Star before you have to move on to the big name. What do you attribute your success?
Casey Blais
So, I think one is, is the firm that I'm with. I think it's good to have great mentors like originally Ed Bull and Andy Abraham now. Having a good mentor is really important to your success as an attorney. You know, we come out of law school and with think we know things but it's a lot like residency those 1st few years of practice. So, you really need to have a good attorney that you can rely on and work with and so forth.
Michael Gossie
So, you said you kind of started 2008, 2009? It's the opposite end of the spectrum where we're at right now where things are going crazy. So, how were you able to make that transition from there to where we're at right now in the real estate industry?
Casey Blais
So, yeah, a lots happened since 2008. Fortunately, things are going really well right now, but you know, thinking back to COVID let's talk a little bit about COVID if we can.
Michael Gossie
Sure.
Casey Blais
Early on in March, you know of 2020, it was a pretty scary time for the commercial landlord side and that's the area that I primarily focus in. And at that time it was, there was a lot of uncertainty as to whether or not tenants were going to pay rent. We received a lot of letters saying that they wouldn't, and so for a few weeks I think a lot of landlords were really nervous, including myself about how this would all end up. Fortunately, we're, you know, many months past that and we've seen that you know, the sky did not fall like we thought it might at the time. But yeah, it's, at that particular time, there was a lot of uncertainty.
Michael Gossie
So, how did the, so on top of all the uncertainty, then you had to deal with the eviction moratorium that was kind of like back and forth, back and forth. How did you manage all that?
Casey Blais
So, originally landlords were trying to gauge, you know, they couldn't, they couldn't cash flow these properties forever too, without receiving rent from tenants and they are used to a certain amount where you know a tenant may not pay for a month or two. But they had, I would estimate, at least 50% of their tenants saying “we can't pay rent” or “we're paying little or no rent” so, what happened with the moratorium is it put a pause button on everything. At first I was a little upset for the landlord because I felt like it was unfair. They were taking it, you know when they shouldn't have to. But in hindsight, it was ultimately, the lenders for the landlords that I think took perhaps the biggest hit. It seemed like a lot of the landlords were working with their commercial tenants to make sure, do workouts, rent deferrals, and things like that.
Michael Gossie
Did you see people collaborating to kind of come up with solutions rather than being, you know, opposed to each other?
Casey Blais
Yeah, I definitely did and I think that's why it worked. You had landlords that you know were patient, they would work with their tenants, tenants reaching out and through that process together they were able to figure out a solution that worked for both of them.
Amy Lindsey
So, what do you see about the office outlook coming up after this pandemic?
Casey Blais
Great question. That's an area that a lot of people have discussed back and forth. I personally, I would be surprised to see a major change in the office space. I think there's more research that needs to be done but I believe that I would say the majority of Americans are going to be more productive in an office than they are in their own home. And so I don't think it's going away. I do think that employers are going to look and see how they could scale back on the space and the amount of space that they've been taking.
I know for our firm as we continue to grow over the next few years, we have right now enough space for the attorneys that we have, but as we grow, we're going to be more creative, we're going to do office shares where folks are in there Monday, Wednesday, Friday and then somebody else may be in there Tuesday, Thursday for some of the offices. So, that way we're able to save and not increase our space or footprint.
Michael Gossie
So, do you see the actual physical office space kind of evolving out of the pandemic?
Casey Blais
I do. I see it more as, definitely, people will continue to work from home. Some folks, at least partially, but I do see the office being an important part of their life and work- life especially.
Amy Lindsey
Maybe a re-work but still an office.
Michael Gossie
Casey, I have many questions I want to ask you, but first I want to say the attorneys at Burch & Cracchiolo have been proving for more than 50 years that a successful business or legal case of any kind starts when you hire the right lawyer. Let them prove it to you. Learn more at bcattorneys.com, that’s bcattorneys.com.
Every corner, it seems like there's a new construction project popping up every single week. So, do you see that continuing?
Casey Blais
I do as long as I think a lot of it's driven by interest rates and they may be artificially low right now, but that's definitely helping to keep the boom moving, in the same, on the residential side. So, I don't see that changing right away.
Michael Gossie
How about the retail outlook? Do you have an outlook on that?
Casey Blais
I think the outlook there is similar to where it was even pre-COVID. I mean there was always a lot of talk about the big box retail going away and being replaced by online. We definitely saw that shift during COVID, but I think more than completely going away, I think retailers have pivoted to be able to provide more services through different means, we saw a lot more curbside pickup. We saw a lot more online orders. And so, I think I, I don't think that will go away if it does change, it will be a more gradual change like we were seeing pre-COVID.
Michael Gossie
And, do you think that's why we're seeing this, like, just meteoric rise in the number of like e-commerce facilities that are being built? Particularly in the, in the far West.
Casey Blais
I think that for sure. Amazon and all the other e-commerce stores are booming and will continue to grow. And COVID definitely increased their revenues and so on. So, I see that as a continual push that we'll be seeing.
Amy Lindsey
What do you think Arizona is doing right to fill the real estate community?
Casey Blais
So, I applaud Governor Ducey and those that enacted the moratorium initially, I think that was a really good thing, at the, at the time I was a little nervous about how it would all turn out. And I think it was just the right pause button that was needed. I think Arizona as a whole is a very strong real estate community and will continue to be so. We're seeing a lot of folks come in from out of town and make their home here, a lot of money being invested in Arizona real estate. And I think that will continue to grow.
Michael Gossie
How important do you think it was when Governor Ducey made construction an essential industry?
Casey Blais
That was a very, very important part of that and I don't know the ins and outs of how they did that, but that was an important decision because that allowed all the construction to continue that was ongoing and just allowed the economy to continue rolling as much as it could during that time.
Michael Gossie
Okay, So what sectors do we need to be watching going into 2022?
Casey Blais
Office. I think office is the biggest question mark is how much folks are going to continue to use it. Those that have leases, are they going to renew, are they going to shrink their space. And so, I would keep an eye on that. The retail sector I think is going to be a lot like It was pre-COVID. We'll just see how that evolves. It will continue to move more online, but I would keep an eye out for office mainly.
Michael Gossie
Are you seeing areas of Metro Phoenix that are hotter than others when it comes to office space?
Casey Blais
Obviously, the opportunity zones that have popped up and those are big, big areas. I think downtown Phoenix has been revitalized in a lot of ways. We, I live close to 44th and Camelback and there's a great project that Red Development is doing there.
Michael Gossie
Some massive project.
Casey Blais
It is a massive project, and so I see that as an area of continued growth, but I would say downtown, Midtown, is, are always great spots.
Amy Lindsey
How are the opportunity zones a game changer?
Casey Blais
Well, they provide special tax benefits for those that decide to invest in those areas. And, so what that does is it helps with the bottom line of the investor group that's coming in. They are typically, as you know, in areas that need work and that's why those tax benefits are put there.
Michael Gossie
Ok. last question, we could talk to you all day, Casey, but we have a limited amount of time. Last question, I'm going to put you on the spot here. What's the runway for this hot real estate market in Arizona?
Casey Blais
On the residential side, I would say as long as interest rates stay good, I think we're going to, we're going to be fine on that. If inflation and interest rates rise quickly, I'm going to guess that the markets going to cool down. I don't know that we're going to have a massive turn like we did before, but for me, that's what I would be looking for.
Michael Gossie
OK, the runway on the commercial side?
Casey Blais
On the commercial side, same thing I would say is the ability for people to borrow money to go in and develop property.
Michael Gossie
Great, well, Casey, thank you so much and thank you for listening to the AZ Big Podcast with Michael and Amy. And once again, thank you to our sponsors, Burch and Cracchiolo.