Steve Martens admits he's never seen an economic downturn like this one.
Martens, 56, the president of Martens Cos., which brokers and appraises commercial real estate, doesn't want to see another one like it, either.
"This cycle has certainly been a real challenge, business-wise, in trying to analyze what we should be doing and where we should be," Martens said.
In Martens' 35-year commercial real estate career — and in the 62 years that the family real estate business has operated in Wichita — there's never been a downturn where businesses quit doing deals en masse and bad assets were held out of the commercial markets.
"This time, it's been very difficult for everybody in our business because the government's taken a different approach — having the banks hang on to their toxic assets," Martens said.
"No RTC (Resolution Trust Corp., a government-operated company that liquidated the assets of failed savings and loans beginning in 1989) dumping a lot of properties on the market.
"There are a lot of people very much upside-down in their property as far as what they owe versus market value, but as long as the banks — because of the regulators — will pretend everything is OK and extend for a better day, the situation kind of hangs on."
Martens is the son of the late Richard D. Martens, a longtime commercial investor and broker who founded the company in 1948.
The elder Martens, best known as R.D., managed his own commercial portfolio and brokered deals. He died in 2002.
"Dad didn't push me at all to join the business," Martens said. "Just growing up in junior high and high school, when your dad owns a lot of properties and lawns need to be mowed, apartments need to be painted, windows need to be repaired, there's sort of a built-in employment deal right there."
R.D. Martens imparted another lesson to his son: Get involved in your community.
The elder Martens served out the unexpired term of Tony Casado on the Wichita City Council in the early 1980s, the highlight of a civic career that included stints on the Wichita Airport Authority, Fair Housing Board, Wichita Community Foundation and the Rotary Club.
"Dad was the one who motivated me to become very engaged in the community," said Martens, a former chairman of the Greater Wichita Economic Development Coalition.
"He taught me at an early age the importance of being out and being acquainted with people doing business in the community."
R.D. Martens and his son are a lot alike, said veteran Wichita commercial broker Rod Stewart, who worked with both.
"R.D. was a very happy, friendly, affable, good-natured man... a real community activist like Steve," Stewart said.
"Steve picked that company up where his father left off, and I'd say he's added quite a bit of luster to the company name. Steve has an excellent resume in the commercial community and the community at large.... I'd do a deal with him in a heartbeat."
Roger Weast, president of J.P. Weigand & Sons in Wichita, said he listed properties with Martens' firm while he worked at Lusk Communities.
"I've always had a very high regard for Steve," Weast said. "He has been very good for our community, and he runs a good shop. Those are the kinds of competitors you like to deal with."
There's a limit, though, to following in his father's footsteps, Martens admitted: There's no run for political office in his future.
"Oh, no, no, no," Martens said, chuckling.
Joined in 1975
Martens joined the family business in 1975 —"I thought at one time about becoming a policeman or a fireman" — and quickly began moving it toward a brokerage.
"My grandfather had been in the real estate business and sold homes for Wheeler Kelly Hagny, which in its day was the granddaddy of the local firms," he said.
"My interest was commercial, not residential. You can only mow so many lawns and paint so many apartments before you think that there's something more that you'd like to do."
So the company dove into brokering and appraising real estate, the latter a very timely move, Martens said.
"We got in at a very good time a couple of years before the savings and loan crisis and virtually overnight, all the rules governing savings and loans and appraisal firms changed," he said.
"Because we were so new, we could adapt very quickly. That kicked us off on a very rapid rise on the commercial appraisal business."
The firm grew into the Martens Cos., with two separate brands: Grubb & Ellis/Martens Commercial Group and Martens Appraisal.
The move to Grubb & Ellis came in 2000, Martens said.
"We wanted to grow our brokerage division, and we were very interested in the ability to train new people," Martens said. "That had been something that we had struggled with.
"We were looking for more of a brand identity and the ability to have more of an impact on a national scale. Fewer and fewer business decisions were being made in Wichita. Lots of activity, but those decisions were being made at the corporate headquarters in Dallas, Atlanta, Chicago, New York. The move gave us the ability to be part of an organization with a national presence."
The state of Wichita
Commercial activity has perked up slightly in Wichita, Martens said.
It's a good time for a business to relocate or build, because sale prices and construction costs are down.
But there's that sticky issue of credit.
"If you're an owner-occupant and you're looking for a building and you have a solid bank relationship, I think you'll find your bank and other lenders willing to talk," Martens said.
"They're not going to loan you 90 or 95 percent of the deal, though. It will be 70 to 75 percent. I guess that 5 or 10 percent down thing was fun and good to have, but we've gone back to a much more normal lending environment."
There's investment interest in downtown, Martens said, but it's muted by some of the public-private development partnerships downtown.
"I see interest expressed by people downtown, but I think there's hesitation on their part because it's gotten clubby, if you will, on who gets to do what deals and who gets favorable breaks and incentives. That has tended to lead people to perceive that the playing field isn't level.
"I'm not indicting the fact that incentives have been given, that they're a bad deal, but recently how that's been done exhibits some poor judgment and potentially could harm us a little bit in future development."