Surviving in today’s economic environment requires a new way of thinking; a need for flexibility; a new business model; and a dose of optimism, according to a panel of industry experts at the 2008 Urban Land Institute’s Fall Meeting in Miami Beach, Florida.
“Anytime you get a tremendous amount of leverage you have to worry,” says Harvey Green, president and CEO, Marcus & Millichap, Encino, California. But Green says he has “made a decision not to participate in a recession,” and instead see this as an opportunity to reposition his firm, “which takes proactive senior management and a positive attitude. To survive, we need to be innovative and break out of the mold.”
Green says it’s time to “shake it up.” He suggested taking people from different teams and putting them into something they don’t know, which leads to new thoughts and new ideas. “How you position for the next cycle is important,” he noted.
That thought was echoed by Frederick Merrill, principal, Sasaki Associates in Watertown, Massachusetts, said that firms need to find new ways to add value to their clients, “think about what they can do differently, and what they can do to differentiate themselves. Rethink projects in terms of sustainability that will make them better socially, environmentally, and economically.” He also suggested talking to clients around the world and try putting them together.
Wesley Podell, development manager, Duke Realty Corporation in Indianapolis, said his firm is looking at their core business and “finding creative ways to do it better. Offering flexibility in deals today is critical, as is doing everything we can to keep tenants by providing terms that help them meet their needs.” He added, it’s important to “focus on what you can control.”
All participants agreed that staffing and management were important elements in a down cycle. Layoffs will occur and most companies favor senior management, but Green suggested a balance between senior management and the best and brightest. He also recommended an open dialogue with staff to eliminate rumors. And, rather than cutting expenditures, he suggested challenging staff to demonstrate how they can get a return on investment.
Using technology differently and finding better ways to do things is critical, Merrill added. Having people with a good attitude is also important.
On the people side, Podell noted that the real estate industry is at risk of losing a generation of real estate professionals. “The reality is people are scared,” he said.
Merrill suggested reaching out to other companies, firms, and individuals who might add value with strategic alliances.
John Walsh, president, TIG Real Estate Services, Dallas, said “its been a rough 90 days; the biggest challenge is filling the spaces. Overall, … I think we have taught ourselves not to overbuild.” But, as Walsh cautioned, “As long as there is uncertainty in the market, we will be in a less confident mode.”
