Paul Harrison is the president of the Rhode Island Commercial and Appraisal Board of Realtors. He is also the director of commercial real estate at Abbott Properties, which has offices in Warwick, Narragansett and Worcester, Mass., providing residential, commercial and business brokerage services throughout Rhode Island and Massachusetts. Harrison works with residential builders and developers throughout Rhode Island. He also previously served as director of the Rhode Island Commercial and Appraisal Board of Realtors for three years.
PBN: What has it been like so far as the president of the Rhode Island Commercial and Appraisal Board of Realtors? What is the group up to?
HARRISON: Leading this board has been an incredibly rewarding experience. The camaraderie among board members and the wealth of experience we collectively bring to the table have made this journey both enjoyable and memorable.
While we face challenges ahead – particularly with the recent changes to the MLS [Multiple Listing Service] – I am confident that with the talented and dedicated individuals on our board, we will navigate these changes successfully.
RICABOR has been dedicated to advancing commercial education for both appraisers and Realtors. We now have our own school, and we formed an educational committee. As part of our commitment, we will be rewarding our members with valuable commercial education opportunities.
PBN: How has the National Association of Realtors settlement last year over commission rules impacted the way Realtors now do business? Has it changed things for you?
HARRISON: On the commercial side of real estate, the new ruling has had minimal impact on commercial Realtors. Negotiating the seller's commission for the buyer's agent has long been a common practice in commercial sales.
PBN: How have commercial real estate values in Rhode Island evolved over the past year, and what key factors are driving these changes?
HARRISON: In a general sense, it is our observation that commercial real estate values have remained somewhat flat, again, on an overall basis. However, certain segments of the market, such as modern industrial, have seen somewhat modest price increases, based upon supply and demand factors.
As you likely know, there is limited supply of these types of properties, particularly buildings less than, say, 50,000 square feet. Office buildings that are large in size and are multi-tenanted would be, perhaps, our greatest concern in terms of their future. As always, the market needs to be looked at either through the eyes of an owner occupant in a single-use building, or differently for a multi-tenanted building likely to be purchased by an investor. Obviously, the magnitude of interest rates bears heavily on those decisions.
PBN: What are the biggest challenges facing commercial appraisers in Rhode Island today, and where do you see the greatest opportunities for growth?
HARRISON: To some extent, there is a scarcity of commercial appraisers in Rhode Island, especially with many of the more well-known appraisers nearing retirement decisions. The appraisal industry has seen declines in membership over many years, and we only see a limited number of young people interested in the profession.
Something that most appraisers learned decades ago is that one segment of the real estate market that always seems to generally succeed is housing. I am reminded of a quote said to me many decades ago during the early part of my career: "Housing is always a good investment because people need to live somewhere.”
PBN: Have there been any recent or upcoming legislative or regulatory changes that will significantly impact commercial real estate appraisals in Rhode Island? If not, would you recommend any?
HARRISON: The entire real estate appraisal industry is under scrutiny because of concerns regarding bias. We are now required to take education on the topic, and critics have been demanding that appraisers be more sensitive to the issue and become better educated.
In other areas, one observation would be that the impact of affordable housing in a larger complex, whether it be a subdivision, a condominium development, or other such developments, cash flows need to be weighed in light of how many units will be deemed affordable, as opposed to those that are market rate.
Marc Larocque is a PBN contributing writer. Contact him at Larocque@PBN.com. You may also follow him on X @Marc_La_Rock.
