Bob Farra was the sales manager and longtime broker at CB Richard Ellis, Colliers International and Martin Smith from the 1980’s –2000’s. His insights below as an “outside observer” offer guidance from someone who has seen 40 years of bull and bear markets.
In the beginning stages of the formation of our United States, Thomas Paine wrote a pamphlet to the people’s of the original 13 Colonies advocating Independence from Great Britain. The year was 1775/76. Fast forward 245 years to today for an answer to most of your questions and concerns regarding this “once in a generational” environment and predicament we all find ourselves engaged in. “What is one to do?....”
In most cases “trying” times use history as travel guides to safer harbors. There is no history in this case, save for perhaps the Spanish flu trials of 1918. The lesson learned from that scare is that it did pass, giving hope to the phrase heard from the elders who survived the Great Depression started in 1929, followed by WW II, the Korean War, Vietnam and Woodstock era, Kennedy’s and MLK assassinations, Watergate, Munich Olympics, Iran hostages, gas lines, the early ‘90’s whose economic tag line of “Stay alive til ‘95” became a business mantra and most recently the 2008 recession caused by an overwhelming ease of money lending, which literally became the classic “house of cards”. All of these times were pivotal moments. Life and both human and economic death upon the doorstep.
The phrase referred to above? Passed down from great grandparents to us today? “This too shall pass”. So, if one believes in history as a guide, is a hopeful soul, and does their individual part to win this new “Great War”, history shall repeat itself and once again “this too shall pass” will be a gifted phrase to continue sharing with those to follow. But for now, the “what to do”, specifically in our industry of commercial real estate, is of paramount concern. We submit the following as an answer:
Use common sense. Since there are no rules to follow in this game then it’s fair to say that if nothing makes sense it’s time to make sense out of nothing (a game it is not. But in terms of strategic thinking having the ability to think it thru in such terms allows for non emotional open mindedness clarity thinking. Therefore the “game” term is in play).
It makes sense to help each other out. The lenders help the landlord who helps the tenant. The tenant helps their employees, the employees survive by helping their fellow’s in commonality. All suffer and no one wins save for all who will, when this too has passed, shall be pumped and primed to go forward to create new opportunities and advances for the next once in a generational moment of crisis. A new road map to follow.
Lenders, save the owners you have lended to. Owners, save your tenants. It is far less costly to do that than it is to start anew with vacant space. Speak to your lenders. They do not want your property. They are in the financial lending business. You are in the real estate ownership business. You are their best resource to get their lended money returned. If you have no debt you can become a lender. There are those with monies available to buy owner financed properties. They take your downstream risks away for you with present day cash flow benefits. That is an option to consider, as there are others as well.
Tenants are vulnerable to both economics and heart. Everyone’s heart is broken by businesses being shut down. The pain in the faces we all see every day is heart wrenching. Common sense promotes compassion. Compassion is not free. Therefore, as a tenant it is paramount that you do the best that you can with what you have got. The best thing you have is your voice. Use it. Communicate with your landlord as you have with your employees. Your landlords are no different than you. People. That’s who they are and what you are. Each no greater or lesser than another.
Was this a business thought or a pep talk? Hopefully both. Both are needed for sure right now. We look forward to seeing and being there with you in near times.
In Common Sense terms..... This Too Shall Pass. Thank you Grandma!
Comments