The Beginning

In 1923, several decades before CCIM began, the “brokers' division” of the National Association of Real Estate Boards was formed to help the “brokerage branch” of the real estate business. It had 236 members. It was the forerunner of the national brokers institute now known as the Realtors National Marketing Institute.

For many years, it was known as the National Institute of Real Estate Brokers. For our purpose, it's the National Institute, or simply the Institute.

In less than 20 years, Institute membership grew to more than 2,800. In the 1947, those who were engaged in commercial real estate formed a committee through which to share and look after common interests. It published a yearly booklet of 60 to 70 pages listing percentage leases -- percentages granted to leases of property used as retail stores.

Woolworth's in Orlando, Fla., for instance, would be rented at a certain percentage of sales. It would help the lessor to Woolworth's in Tampa, Fla., to know what that percentage was. This was the Commercial Property Committee.

Another commercial real estate group were the traders or exchangers of property, who cared more about property as investment than as rentable by users. The exchangers are our focus, because West Coast exchangers devised the courses that became CCIM.

Investment was their chief interest, with special attention to the tax benefits of trading or exchanging, rather than buying, selling, or leasing commercial property. About the time the percentage leasing people were cohering as an organization, these exchanges were getting into education.

It was 1952 when a commercial realtor named Jim McMichael began teaching “exchanges and taxation” at the University of California at Los Angeles. McMichael, a former Internal Revenue agent well versed in the income-tax aspects of investment, taught in a real estate certification program -- the nation's first -- sponsored at UCLA by something known as the California Fund for Real Estate Education.

Among his early students was recently discharged Air Force non-com named Jay Levine, a realtor named Fred Becker, and another named Frank Curry. Before long these three students were helping McMichael teach his courses.

By September 1959, a UCLA exchanges and taxation course might be taught by McMichael, Levin, and Curry, with help from a UCLA extension professor, Karl Venter. Add a couple of Arthur Andersen CPAs, and you had your faculty.

These Californians were not the only exchangers. About the time McMichael began teaching, an international exchangers group was formed by practitioners who used the vernacular and called themselves traders. This International Traders Club came out of National Institute membership. Stewart B. Matthews, of Baird & Warner in Denver, chaired this group throughout the 1950s.

It grew very fast, reaching 6,000 members by the 1960s, when it sought (unsuccessfully) to separate itself from the National Institute. These were investment practitioners who traded information informally and operated as a network but offered no formal course. Its interests coincided in many respects with the Californians.

Indeed, Jay Levine was this group's chairman when it later merged with other commercial practitioners. But it didn't organize an instructional program, which is what the California exchangers set out to do in the 1960s.

The Californians held their first session in a Los Angeles restaurant in 1959, taking it as a one-shot operation. But at the end of it, Jim McMichael challenged them to come back for more. They did, meeting again a few months later at a motel.

A name was in order: the group called themselves Certified Property Exchangers, CPE for short. That would be their program. They would put practitioners through their courses and grant a sort of degree, or at least a “designation” -- the CPE.

The internal revenue code had a lot to do with the CPE program, because it provided for deferment of taxes when comparable properties were traded rather than sold and bought. It was the law of the land, but most practitioners didn't know it or if they knew didn't know how to make it work for them and their clients. The process called for overall investment analysis.

Within two years of the first meeting, Frank Curry was submitting bylaws for approval of the members. He and McMichael, never completely satisfied, were planning how to upgrade the program.

Meanwhile, L. Allen Morris and others on the purposely small Commercial Property Committee were holding their annual clinics at the Drake Hotel in Chicago and sharing notes on leasing of properties -- for use rather than investment. The much bigger International Traders Club, a sort of glorified committee of the National Institute, was trading without educating toward earning a designation. This was the Californians' forte, education.

The Californians, now bylawed and incorporated, had a good thing going; but they wanted a better one, something to give their program more of the respect it was entitled to. They went to the California Real Estate Association and persuaded it in 1962 to sponsor their program.

By then another practitioner-visionary had joined them -- Victor L Lyon, a realtor and appraiser from Tacoma, Wash. -- who attended a one-day session in Seattle and was converted.

The course Lyon attended was primarily the work of Jim Davenport, a Washington Realtor who has brought CPE into his state. Lyon had read about these “California brokers” coming to town.

One was McMichael, who continued as a CPE-CCIM instructor to his death in the early 1970s. The other was the “long-legged” Jay Levine, with who Lyon formed a partnership in real estate education that persists to this day.

Lyon joined the CPE faculty. The program moved into the middle 1960s under the California Association of Realtors' aegis, one of many real estate clinics but unique for its content and organization. Other practitioners were discussing the ins and outs of investment property, but none in the systematic, course-oriented manner of CPE, complete with final examinations and grades.

To the two advanced CPE courses on exchange and taxation was added a third, on leasing and development, which emphasized marker study rather than tax and financial analysis. Thus, CPE moved to cover the spectrum of commercial real estate and became more than its “exchanger” name implied.

Meanwhile, two CPE instructors rubbed shoulders with an investment expert who was to achieve fame and notoriety before his death in 1987 as controversial head of the CIA under President Ronald Reagan. This was Bill Casey, who addressed Levine's UCLA class on estate planning and later co-authored a book, “How TO Make Real Estate Exchanges,” with Levine and McMichael.

In those days, prospective CPE students were informed of the benefits of the course by a brochure that asked,” Are you informed about real estate exchanging?” In case they were not, they were told, “The public demands it! Income taxes make it necessary! It means higher earnings for you!” On the brochure was the triangular CPE logo: two arrows pointing in opposite directions, one above the other. Two-way deals, the brochure might have said.

 The practitioner might face “more than 20 seller circumstances” that called for exchange rather than sale and “rebuying,” the brochure said. Any broker had at hand commissions of $100,000 on listings “ready for exchange marketing to a demanding public,” with more than one commission available per exchange, if the broker only knew how to arrange them.

Exchanging was better for client and broker. For the client (still called a “customer”), exchanges were beneficial because eight of 10 sales depleted the seller's estate because of taxes. For the broker, exchanges usually did not require cash and institutional refinancing.

Exchanges could be financed with “paper,” but again only if you know the ropes. Furthermore, and this was why it paid to educate exchangers, the more exchangers, the better, because by its nature exchanging required cooperation among brokers. Several might be required to put together a deal, which to the single broker might look like an impossible puzzle.

In sales, it didn't work that way. Brokers were in competition with each other. Indeed, when Fred Becker broke into real estate in 1947, a broker could hardly get another broker to give him the time of day, let alone show him how to do business. It was to exchanger's advantage, therefore, to raise exchanger's standards and stir up exchanging activity.

The CPE course gave nothing away, however. Not that the tuition was stiff; it couldn't have been with the $25 a day an instructor earned. It was the cost of learning, never low when the material is difficult; and this wasn't easy stuff.

If McMichael and the rest did not offer blood, sweat, and tears, at least they required attendance at 30 hours of lecture and workshop -- three course of five days each, 9 a.m. to 4:30 p.m., with time for lunch and coffee breaks. The intended atmosphere was one of the academic training with emphasis on application.

The classes offered “practical, down-to-earth, inspirational and imaginative” material taught by practitioners. The content included opportunities, techniques, “exchange compulsions,” house trade-ins, two-way exchanges, more-than-two-way exchanges, economic analysis, how to arrange a commission when no cash is available, financing exchanges with “paper,” and instruction in tax motivation.

It was all that a broker could want. And all had the stamp of approval of California Real Estate Association.

What was in it for the instructors besides the less than princely per diem allotment? The more exchangers the better, for one thing, as we have seen. Enthusiasm for the subject matter for another. And the camaraderie of it.

The average broker wasn't interested, because he didn't share the same values. A few “upper achievers” saw the need for it, recalled Fred Becker.

“We could have taken (the contents of) these courses and made millions,” he said, clearly proud of his involvement in CPE and CCIM for 25 years in all. “But we were trying to create a designation recognizable by the public.”

Becker recalls spending “hundreds of hours” writing courses and then teaching them. Others also worked long and hard on the early classes, including Palmer Berge of Seattle and Jim Baker of Portland, Ore. Becker bemoans that a lot of new CCIM instructors don't realize what went in those early days.

Ninety percent of the industry doesn't either, for that matter, Becker says. The goal then as now was “to upgrade the profession we loved and develop a cadre of people we could communicate and do business with,” he says.

The California-sponsored program moved into several western states -- Washington, Oregon, Idaho, Montana, and Hawaii. Successful and confident in their product, the Westerners looked east to Chicago, where the National Institute of Real Estate Brokers was headquartered. Levine, Curry, and McMichael talked up their program at the 1963 national meeting. By now they were drawing students nationwide. It looked like time to offer it outside of a few states.

NIREB was heavily residential at the time, however. This engendered some opposition or at least suspicion. Moreover, the non-exchanger commercial people -- the leasers, we may call them -- were suspicious of the exchangers.

Some of them wondered what sort of hocus-pocus this was and whatever happened to good old honest leasing for percentage of sales? Among these exchangers and traders, on the other hand, there was an investment and tax-oriented program that didn't seem right.

Some hard feelings following on suspicion, and it took a couple years for national to come to terms with California. The Californians had their own misgivings: Would the program become diluted under national sponsorship? Would California lose control of West Coast instruction?

It all had to be worked out and finally it was. By December 1965, the California and national staffs were working over a plan devised by Jay Levine, whereby national would award the CPE designation according to California standards. Standards were everything, after all. They were what California was selling to the nation, that and qualified instructors.

Exchangers allied with the National Institute signaled their willingness to take over COPE programs. This was a stormy two-year prior disagreement among the exchangers apart from the California connection-related problems. It was a time when the fast-growing traders club was trying to bolt the National Institute, and feelings were high.

The storm abated under the joint calming influence of Jay Levine, who in 1967 chaired the ITC/Exchange Division, and L. Allen Morris, who headed the Institute. Among other things, Morris made sure the traders and other commercial-investment professionals were represented for the first time on the Institute's board of governors.

Meanwhile, the California connection was cemented. By June 1966, agreements were in and accounted for with the Institute. The first national or non-West Coast CPE courses were set for February 1967. No money passed hands. California “exchanged” its program for national exposure and prestige and staff support, on condition that it not be diluted. There were early problems regarding turf. At one point in 1970, the California Association wanted it back. But further agreement was reached, and the course remained with the Institute.

At the Institute, meanwhile, plans were laid to form a new commercial-investment division of exchangers and leasers, which would grant a combined exchanging-leasing designation based on completion of the newly acquired California program. The new designation was called CIM at first, standing for either Commercial Investment Member or Certified Investment Member, depending on who you ask. The second C added later was for Commercial or Certified, again depending on who you ask.

And so what? CCIM it became, for Certified Commercial Investment Member. The more than 200 CPEs already designated by the Californians were grandfathered in. More than 160 National Institute members were given the same welcome, based on their expertise and standing in the business/profession, making in 1968 and 1969 -- at long last a demanding, organized curriculum taught by high-minded practitioners on a national basis with national organizational backing. CCIM was born.

< Chapter 1: CCIM Today (Written in 1988)

Chapter 3: The Early Years (1967-72): A National Program >