Category — Economics & Finance

My question today is a simple one: What’s your vision for the future and what are you doing about it? Much has been written about surviving the downturn – what to do now, the “new normal” and other tips for how to navigate current market conditions. And while I certainly have no gripes about being in the moment from a tactical perspective, I’m concerned that as an industry we don’t lose sight of the value of looking forward. In today’s post I’ll share my thoughts on the importance of looking forward.

As the first few weeks of 2010 pass, business owners, executives, employees, and consumers alike are watching for emerging trends, which will test the accuracy of the 2010 prognostications posited by various industry experts.  While it may be too early to tell, there have been some signs, signals and even M&A transactions which point to industry consolidation and corporate restructuring among brokerages in the commercial real estate industry.  This is likely to continue throughout the year.

While commercial real estate markets are not static, I’m always surprised by the number of so-called “professionals” that operate as if they were. As the landscape around them changes, rather than understanding and adapting to new market drivers, many just prefer to pretend as if it’s business as usual. It is those practitioners that adapt to the fluidity of the market that become innovative market leaders, and who thrive during even the toughest of market conditions. Likewise, it is those practitioners who refuse to change with the times that push themselves into irrelevancy, and eventually become self-inflicted casualties of the weeding-out process.

As 2009 draws to a close I thought this an appropriate time to not only sum up my thoughts on what has been a tough year, but also to share my feelings on what I believe will be a better 2010. I would also be remiss if I didn’t use this opportunity to thank our stakeholders for their continued support, without which, we would not have fared as well as we did. The contributions of our clients, employees, investors and partners have been truly remarkable, and I can’t imagine having to navigate 2009 without their steadfast commitment to the Sperry Van Ness brand. Please accept my wishes for a very happy and safe Holiday Season as well as a prosperous New Year.

Market timing is always an issue when evaluating whether or not to acquire a commercial real estate asset. While the old investment axiom of “buy low and sell high” summarizes the goal of all prudent investors, it also serves to paralyze many investors as they find themselves waiting for the “right time” to make their move. One of the smartest investors I know says, “the only thing that waiting for the bottom insures is that you’ll miss it.” A recent survey conducted by PricewaterhouseCoopers LLP., and the Urban Land Institute (ULI) forecasted that the US commercial real estate markets will hit bottom in late 2010, so in the text that follows I thought it my be useful to summarize the findings of the survey for those of you waiting for the bottom…

There is little debate that current commercial real estate market conditions are rough…so rough in fact, that many formerly well thought of brands have not survived the downturn. Regrettably, there will be more casualties before we see the proverbial light at the end of the tunnel. While I’m sympathetic to those who have suffered emotionally and financially as a result of the times we’re in, the harsh reality is that their suffering has less to do with the state of the economy, and much more to do with how they chose to operate their businesses. In the text that follows I’ll shed an uncomfortable, but accurate light on what has become an altogether too common excuse…the economy.