“Stay positive, but tell yourself that it is going to be rough,” says James Randel, commercial real estate attorney, broker investor and author. “I think those who have survived, and in fact, sometimes thrived, are those people who are able to set their minds straight so that once adversity hits the mind is prepared for it.”
Randel, like many other experienced people in the real estate industry have seen ups and downs in the economy, and as grim as some of those cycles have been, has survived all of them.
“What has got me through several of those cycles is not kidding myself about the future,” he says. “If you can be realistic with yourself and say, ‘Hey I know this is going to be tough, I’ve been waiting for this adversity, I know it will set me back, but I’m prepared to fight and get back up again,’ you will survive too.”
Randel was the keynote speaker at the 2008 BizTimes Milwaukee Commercial Real Estate & Development Conference in November, when he spoke about the tough economy and the future of the real estate industry.
Local veteran real estate professionals tend to agree with Randel and have a responsibility to show a younger generation of brokers what they need to do to ride out this storm.
David Boerke, principal of The Boerke Company Inc. in Milwaukee, teaches a course at his firm for new brokers on the cycles of the market.
“I teach that course mainly because I have seen a few cycles in my time,” Boerke said. “Each one was caused by something specific, and each one was a little different.”
According to Boerke, regardless of the cause of a down economy, there are some things about being a broker that should never change.
“Things that are important in a good market are even more important in a down market, and that includes a good source of information and market knowledge, and maintaining good relationships,” he said.
Boerke and other experienced real estate professionals believe that a down economy also creates opportunities. According to Boerke, the Chinese words for danger and opportunity combine to form the Chinese word for crisis.
“Every time there are problems like this, there are opportunities. It’s an exciting time for young brokers who want to work hard, because in tough times, people want to listen to you,” Boerke said.
“I always tell my younger employees, that these things are cyclical, there is nothing you can do to repair the economy, so just work hard and try to identify potential opportunities,” said Jim Barry III, president of Colliers Barry in Milwaukee. “It is actually one of the best times to be in the real estate industry, because once we start to come out of this down cycle, there will be tremendous opportunity to meet demand.”
According to Mike Judson, president of Judson & Associates S.C. in Pewaukee, his company isn’t doing anything different in this economy. The opportunities are still out there, but his company just needs to dig deeper to find them, he said.
“This is a great time to learn the market, to network and make cold calls and market properties,” Judson said. “When it is slower, younger brokers have more time to focus on their tasks and educate themselves.”
Peter Glaser, first vice president at CB Richard Ellis in Milwaukee, handles all the training for the new brokers at his firm.
“I think first and foremost, you can’t overreact, you must recognize the changes in the market and reposition how you approach your business based on those changes,” Glaser said.
According to Glaser, CB Richard Ellis has turned its attention to filling existing retail space rather than ground-up development.
“An important thing to remember is that this is a long-term business, one with long-term relationships,” Glaser said. “You have to establish those relationships now and get them in place for when the economy does rebound.”
Sam Dickman Sr., president of Dickman Company Inc. in Milwaukee, has set aside some operating capital for 2009.
Dickman and many in the local commercial real estate business believe the industry is somewhere near the bottom, but at least the first quarter of 2009 will be slow.
“Overall, I think its going to be a tough year,” Dickman said. “I don’t think there is going to be a ‘crisis,’ but it will be tough, and we will be ready to take off when things start to look better in about a year.”
According to Dickman, it is important to maintain a positive outlook in a tough economy and get back to the basics.
“With any business, those who have a negative outlook or haven’t had any experience in the basics are not going to do well in bad times. It’s about getting back to the basics that is going to make people successful or at least survive,” Dickman said.
“We have seen this before,” Glaser said. “I don’t think anybody could have sat here a year ago and predicted where we are today. Things could just as easily rebound in 2009.”
“Things always take you forward,” Judson said. “You can always point back and say this country has been around over 200 years and we will get through this too. It’s a cyclical thing.”
