A petroleum industry engineer’s transition to commercial real estate is demonstrating how technical backgrounds can identify development opportunities that traditional real estate professionals overlook, particularly in sites with infrastructure constraints.
Michael Mayhew, Vice President at Commonwealth Commercial Partners, leveraged his mechanical engineering background to recognize potential in an industrial site that institutional developers dismissed, ultimately creating Richmond’s first new small-lot industrial park in over 20 years.
Michael Mayhew, who trained as a mechanical engineer and spent seven years in the petroleum additive industry, transitioned into real estate after completing an MBA and taking courses in finance and real estate, which inspired his shift into commercial development.
The Engineering Advantage
According to Mayhew, his technical background provides a different lens for evaluating development opportunities, particularly when it comes to understanding the operational needs of industrial businesses.
Mayhew notes that the analytical thinking and problem-solving skills he developed in mechanical engineering continue to influence how he approaches real estate development.
This engineering perspective proved crucial in the development of Pony Farm Industrial Park, where Mayhew’s team recognized that a site without public utilities could still serve a significant market need – something that institutional developers had overlooked.
Seeing Opportunity in Constraints
The Pony Farm project illustrates how technical backgrounds can help developers identify viable opportunities in sites that others dismiss due to infrastructure limitations. According to Mayhew, the site’s lack of public utilities was precisely what made it economically feasible for his team while keeping institutional competitors away.
Mayhew explains that the site lacks public utilities, requiring developers to rely on a well and septic system. While this limits the scale and density suitable for institutional developers, it does not prevent smaller industrial projects. His engineering experience helped him recognize that many industrial users can operate effectively without high-density infrastructure, making the site well-suited for small industrial buildings with ample outdoor space, as implemented at Pony Farm.
Understanding End-User Needs
Mayhew’s technical background appears to provide insights into the operational requirements of industrial businesses that pure real estate professionals might miss. His engineering experience helps him recognize which infrastructure constraints are genuine barriers versus which are simply preferences of large-scale developers.
Mayhew notes that large-scale projects, like a 200,000-square-foot distribution center, require public utilities and are not feasible on the site. However, smaller industrial users can operate effectively despite these infrastructure limitations, meaning the constraints that discourage institutional developers do not hinder functionality for smaller tenants.
This understanding of end-user needs has proven valuable in a market where, according to Mayhew, many industrial businesses have been operating in the same areas for decades without opportunities to own their own facilities.
The Competitive Advantage
Mayhew’s non-traditional background has enabled his firm to compete in market segments where institutional players won’t operate, creating opportunities for both developers and end users who have been underserved by conventional real estate development.
The success of Pony Farm – which sold approximately 75% of its lots before infrastructure completion – suggests that technical professionals may be better positioned to identify and serve certain market niches than traditional real estate operators.
Mayhew clarifies that his engineering background doesn’t make him inherently more capable of running industrial businesses. While he has a basic understanding of his clients’ operations, he couldn’t perform their work directly. However, his training does influence his approach to process and work ethic in real estate development.
Broader Industry Implications
Mayhew’s success suggests that real estate development may benefit from more cross-disciplinary talent, particularly as markets become more specialized and technical requirements become more complex.
His engineering background provided the analytical framework to recognize that infrastructure constraints could be features rather than bugs in certain development scenarios – a perspective that might not occur to developers with purely real estate backgrounds.
Commonwealth Commercial Partners’ approach demonstrates how professionals from technical industries can bring valuable problem-solving methodologies to real estate challenges, potentially unlocking opportunities that traditional approaches miss.
Whether more technical professionals will follow similar paths into real estate development may depend on how widely the industry recognizes the value of diverse professional backgrounds in identifying and executing complex development opportunities.
