Walking through the front doors of Reck Agri Realty and Auction is like walking into a trophy room of sorts.
The framed items that line the walls say a lot about what the business Marc Reck and his wife, Jennifer, started in 1990 is all about.
Yes, there’s the obligatory “brag wall,” highlighting professional achievements and accolades — but it’s tucked into a corner that is easily overlooked.
Dominating the front room of the company’s new “home” on E. Chestnut Street — they moved in following the South Platte River flood in 2013 — are photos of auctions past. While Reck says it’s a good marketing tool to show that the sales can draw a good crowd, what stands out as he talks about the pictures is the stories he can tell about the people who were there. In one photo, he quickly identifies some local producers — some of whom have since passed away — with a smile that lets you know he’s talking about friends. There’s an air of quiet pride as he points out an auction with world champion auctioneer John Korrey, another local. And there’s real emotion in his voice as a photo of Bruce Evertson, a major oil producer in Nebraska, brings up the memory of Evertson’s tragic death a few years ago.
When it comes right down to it, what Reck’s business is about is building relationships with people. Part of the process of helping clients sell their agricultural land involves knowing their story — not only what they’re selling, but why. Reck said it’s important for him to understand what the client wants — or needs — to get out of the sale, which means he is privy to personal information about their financial means and way of life. Like all successful relationships, it’s a matter of trust, and that’s something Reck has the utmost respect for.
“That’s one of our core values,” he said.
On his business card, Reck’s title is listed as broker/owner, and he says his business is primarily land brokerage — helping people sell and purchase ag real estate. The Reck Agri team also includes three full-time employees and an associate broker. But don’t let the titles fool you: “Basically, we’re problem solvers.”
In the simplest terms, he said, selling real estate is usually the result of the “4 D’s:” debt, death, divorce or dissolution of partnership and/or corporations. “We’re there to help people work through it.”
That can mean taking on some other roles as well, such as mediator and even counselor, particularly when dealing with families or estate situations. If a property has been in a family for a long time, there tends to be emotions involved that can impact the selling process. For many owners, the land is a part of their way of life and their legacy, as much as it is their business.
Being able to work with people and having their trust is key in those situations. That means having a reputation for getting things done, having a good marketing plan, finding a buyer and closing the sale, Reck said.
And although such situations have their challenges, “I love to sell property that’s been in a family for a long time, because that means that it’s treated that family well, and it’s usually well taken care of,” he said.
It might also mean that potential buyers have been waiting for the property to come on the market for a long time and are anxious to bid, he added.
There are several clients that Reck is working with now where the land has been in the family for 100 years — and given the likely buyers, the property won’t be back on the market for decades more.
It’s part of a transition that Reck said is one of the three main factors impacting ag land right now: what he calls the “aging generation.”
The Reck Agri territory covers 31 counties in eastern Colorado, the Nebraska panhandle, southwest Nebraska and northwestern Kansas, encompassing some 21,000 landowners. Reck estimates about 45 percent of those owners are absentee.
“We’re currently seeing an ownership change from the second to third generation,” he said, explaining that the land has passed from the grandparents who bought it in the early 1900s down through their children, and is now turning over to the grandchildren.
“Eighty percent of our business comes from working with people who are with estates or somebody who’s inherited a property and now wants to sell,” he said.
He cited estimates that over 65 percent of the land ownership will change in the next 10 years due to the generational turnover. “And those are some pretty important facts for people who own land. That’s pretty important, because that means the majority of the ground, the ownership’s going to change,” he said.
Two other factors that are central to his industry are commodity prices and interest rates. With commodity prices low, he said, “buyers are more discerning.”
When commodities are strong, there’s more of a demand for land, and buyers are more likely to pay more even if the land’s not in great shape. But when prices are tighter, “they really look at how much herbicide, how much fertilizer” and how long it will take to make the land productive enough to be worth the investment, which can drive down land values.
Using a graph he made that shows the trends in interest rates, commodity prices and land values since 2000, Reck notes that 2010 brought “a perfect storm” of drought, a low dollar, high export demand, excellent production and low interest rates. Nobody wanted to sell, and land prices climbed, peaking around 2014. But then commodities tanked, sparking a couple of years of declining property values.
Now Reck sees those land values levelling off, and predicts prices will remain fairly stable for awhile. A sustained increase in commodity prices could raise land values, while rising interest rates could push them back down. But, he explained, an individual parcel’s value can be affected by more local concerns — quality, reputation and the strength of the neighboring landowners.
That’s a reflection of some of the more universal aspects of the real estate business. But while some of the basic principles may be the same, Reck believes strongly in the importance of specializing in a certain type of real estate, because each requires its own skill set. While a residential real estate broker is going to focus on square footage, whether the water heater works or how many bedrooms a home has, Reck said the “features” he’s looking at are things like water rights, mineral rights and soil types.
Those are the kind of facts he’s familiar with, having grown up on his family farm. And that’s why, when he decided to pursue a career in real estate, he chose to specialize in agriculture. “You can’t do everything, and I love ag,” he said.
Another unique aspect in agricultural real estate is that, “when we sell ag land, we are seeing consolidation of ownership,” he said. He said over 75 percent of the buyers he works with are other farmer-operators in the area who are looking to add to their operation. At a recent auction in Otis, the six parcels he sold went to six different local farmers. A bright spot, he said, was that two of the buyers were under the age of 40.
The consolidation of agricultural property is part of a cycle, he noted. “We see some individuals who put together large properties and now they’re getting older, and they’ll either transfer to the next generation or the land will be sold and maybe split up,” he said.
Unfortunately, sometimes those sales are the result of poor estate planning or succession planning, he said. Having good plans in place is a major challenge of land ownership, and “the lack of (planning) creates business for us.”
And it’s not business he’s hurting for. Reck said that with the size of the company’s territory, he can put 3,000 to 4,000 miles in on the road in a typical month.
Fortunately for buyers, bidding on a parcel of land no longer requires travel, no matter where they are in the world.
When Reck started his business, most ag land was bought and sold through private treaty — transactions similar to purchasing a home through a residential real estate agent, where the contract is negotiated privately through the buyer, seller and broker. At the time, auctions were considered “a method of last resort,” Reck said.
In 2001, Reck Agri started doing more auctions and auctions have become first choice for a lot of people. In their current location, they have a separate building to hold live auctions.
There are positives and negatives to the different methods of selling a property, and his company provides that information when making a recommendation to a client on how to go about liquidating their land. One of the advantages of an auction, he noted, is that you know that the land will be sold by a specific date; Reck Agri averages about 76 days from the date he contracts with a client to the final closing on a property.
As of last year, Reck said the business has completed over 295 live auctions. They also launched a new, online-only option for auctions and have conducted seven of those since last summer.
Reck said the business has “always been known as being on the leading edge” when it comes to technology. They developed a proprietary online bidding platform for multi-parcel auctions that allows bidders to participate in live auctions remotely. Their online-only auctions are timed — they start on a certain date and time and run for a set length of time, then bidding closes and everything’s done. It’s comparable to eBay or, for farmers, Big Iron.
“There’s pros and cons to either one,” Reck said. “It just puts another tool in the toolbox.”
However, he admits that with the online-only option, a part of him misses the crowds and face-to-face interaction that a live auction can bring.
For someone who clearly cherishes the relationships he forms with the people he works with, it only makes sense.
Sara Waite: 970-526-9310, [email protected]