Talk to enough small business owners in Madison and the name Kent Yan is bound to come up.
The 39-year-old owner of Plato Commercial Real Estate has helped find homes for countless restaurants, day care centers, nonprofits and more, including Mishqui Peruvian Cuisine, Little Tibet, Anesis Family Therapy, Affordable Dental Care, Savanna Beauty Supply, the Wisconsin Latino Chamber of Commerce and the Latino Academy of Workforce Development.
Yan represents both landlords and tenants in sales and leases. Many of his clients are entrepreneurs of color with little startup capital, people who’ve had to “scrape money together and borrow money from family and friends … and work on a shoestring,” he said. Finding a place that fits their vision and budget can sometimes take more than a year.
Yan grew up busing tables and stringing snow peas in his parents’ downtown Chinese restaurant, the now-shuttered Yan’s Soupcon. He got interested in real estate as a kid when his parents bought a new place on University Avenue for their restaurant.
“When I learned that I didn’t need to sit in the office all day, I was like, ‘Yep, I’ll try that out,’” said Yan, who studied real estate at the University of Wisconsin-Madison and has worked in the Madison market ever since.
In a typical year, Yan does around 60 paid deals. Last year was his “craziest,” with around 75 deals. But his work involves more than finding properties and closing deals. He also educates clients about the various grants and loans the city of Madison offers to help eligible businesses renovate or purchase their properties, and sometimes helps them fill out applications. He’s even started teaching clients the basics of investing, urging them to let their hard-earned profits grow.
“Before it was basically like, ‘Let’s get the cash, buy the house and buy the cars,’” Yan said. “Now it’s more like, ‘OK, what do we do with this? How are Caucasian business owners able to do what they do, and not work as much at the place?’”
It’s that kind of support his clients remember.
“I always tell Ken, ‘You should get some kind of award from the city for helping all the underrepresented community people,’” said Namgyal Ponsar, co-owner of Little Tibet restaurant. “He’s the one who encourages us.”
Yan talked with the Cap Times about rising rents and the benefits of investing business profits. The following interview has been edited for length and clarity.
You grew up working in your parents’ restaurant. What did that teach you about what things are like for small business owners in Madison and especially for business owners of color?
Growing up, I saw my parents working every single day, Monday through Sunday, and long hours too, starting a bit before 10 a.m. — because I remember watching “The Price Is Right” at the restaurant — and not coming home until 11 or midnight.
I have a lot of respect for the owners that put in those hours. Those that I have worked with and seen put in those hours have ended up starting more locations, or they’ve been more successful than people would expect.
I think the thing that a lot of (business owners of color) now are learning is how do people generate family wealth. They’ve been learning how to buy homes and real estate. I’m actually having a coffee meeting with a friend (and client) where they have no understanding of stocks or money markets and crypto. They’re starting to learn because they’ve had the extra income coming in from a successful business.
There’s opportunities outside of a bank. One of my financial planners, they have a money market paying about 4.5% (interest). We don’t need (our money) to just sit in the bank and do nothing.
I’ve talked to multiple business owners who rave about you and the role you played in getting their businesses going. Do you think it’s typical for business owners to have that relationship with their commercial real estate agent?
I would say, optimistically, yes. A lot of agents have great relations with their clients. I’ve had a lot of repeat clients. It’s very humbling to hear that there’s been people that have had good experiences with me.
What do you hope the relationship would be like between a business client and a real estate agent?
Everyone has a circle of friends, or a circle of eyes and ears. At a business level, most businesses have an accountant, a lawyer, an insurance agent, maybe a real estate agent.
Unless you have a great relationship with your lawyer or accountants, you’re going to be paying for those guys (every time). Insurance agents and real estate agents are two unique things. We’ve seen so many things. We act as eyes and ears, as well.
I’ve done that for a few clients. We’ll just sit down and have a coffee or just chat. Of course, there’s always the hope of an opportunity of helping them with something else, but it’s that relationship that you have to build. I’m not just here to sell you a property or help you find a space. If you want to use me as a resource, please do.
How has the market changed since you started?
Prices have gone up a lot. Most of the folks I work with are startups and more economically cautious folks. Ten years ago, you could find good Class B offices for about $16 or $17 a square foot (per year) and Class C for $11 or $12. Now that’s all bumped up about $2 or $3 a square foot. It doesn’t sound like much, but it’s quite a big jump. Retail has seen a lot of that too.
We’re losing inventory for entry-level offices, and a lot of the smaller warehouse units — 1,500 to 2,500 square feet — are hard to find right now, too. Those have been snatched up, and leased for a very long time.
Do you think prices are driving folks out of Madison and to surrounding areas?
No, it’s all the same. There’s a unit down in Stoughton, by the new hotels and the Walmart, that’s almost $50 a square foot. If anything, Madison has more options for more affordable places because of the size, age, demographics and geographics. Sun Prairie is worse. On Grand Avenue, when you put in (pass-through expenses), everything’s like $25 to $35, maybe up to $40.
Is there a specific type of real estate that’s really in demand right now?
Small warehouse units anywhere. If you’re talking about retailers, everyone wants to be on a main drag.
Unfortunately, sometimes folks have the dream and the desire, but they don’t have the financials to back up the project. I’ve talked to a restaurant gentleman who has a budget, and he wants a turnkey (place). I told him there’s nothing out there.
It’s one thing to say, “I think I can afford $7,000 a month in rent,” but landlords are going to scrutinize your financials to see if you can really afford it. Some people have this vision: “Once I’m open, I can make this money.” That’s great, but what happens if you don’t? What happens if no one comes in?
Would you like to see more business incubators, like co-working spaces or shared kitchens, as entry points for folks looking to get started?
It depends on the type of business they have. When I first met her years ago, (Little Tibet restaurant co-owner) Namgyal Ponsar talked about the Madison Public Market and how they were going to go into it. I said, “It’s city-driven, right? … Let’s go find you a store first, or maybe do a food cart first.” The city has a very kind heart, but that process took over 10 years, and we don’t even know how much it’s going to cost for a tenant to go in there, or what incentives there are.
An office incubator is awesome. Those are low risk for a lot of folks that need an office, but those are privately held things. The city has done a nice job in having pop-up shops on State Street for a few months for retail vendors to help them get the name out there. But we go back to the rental rates of the market: It’s not as affordable as people would like.
