Posts Tagged ‘market downturn’
Posted by Sibet B Freides in Real Estate Economics, Real Estate Trends on March 10th, 2009
Someone recently asked me what should be done to survive as a commercial broker in today’s market. Several things come to mind against the backdrop of all the calamitous bad news that we face everyday.
This is a good time to go meet and talk with your clients. They certainly aren’t working on deals. Go see them and get to know them all over again. Reforge relationships. You will be more poised than your competitors to be conversant with and their capabilities as opportunities begin to resurface.
Take advantage of distressed projects now on the market. There are more and more opportunities coming on the market where lenders and partners took possession of underperforming or cash strapped projects everyday. They cant manage/lease/operate these deals. Find the developers who are liquid, or better yet match them up with equity sources who stand ready to plunge first into areas of the best opportunities that can be bought at fractions on the dollar of previous basis. CASH is KING.
Identify, prospect and get to know the equity sources. You bring a tremendous value to your developer clients when you are able to match them up with the right equity sources which will enable them to access more deals and to effectuate deals. To do this you must be able to ‘talk the talk’ of CFO’s and have the ability to generate and walk through proforma’s and analysis. This is a much better way of getting involved with a favored project if you do not control the listing than simply trying to bring a buyer. CASH is KING.
Last but not least, the market has experienced a new paradigm. For 15 years, financing, credit and leverage has been easy to come by. For that reason there were more buyers than product to go around. Product was scarce and Listings were an emphasis. That was then, this is now. Find and establish relationships with buyers who have deep pockets. You may even have time to cultivate foreign money and investors, like you’ve been telling yourself to do for years.
While you are at it, upgrade the quality and size of your transactions. In a downturn such as this, a general flight to quality will exacerbate itself. Try to work on projects for which the quality justifies institutional exit strategies. There is more money at the top.
Article Written by Bruce A. Davis, Senior Partner of Bryant Commercial Real Estate Partners, LLC of Atlanta, Ga www.bryantcre.com and member of Market Solutions Group