Lee Kiser is a multifamily expert, active broker and Principal of Kiser Group, Chicagoland’s leading mid-market multifamily brokerage firm.
Savings and loan crisis, Gulf War, Black Monday, 9/11, the Great Recession … and now, the global pandemic. Every time I think I’ve experienced everything that can turn my business or industry on its head, the commercial real estate gods laugh at me. But although every single bull is different, this isn’t my first rodeo. Real estate, like any market, has cycles, and then it has times where all the rules get changed. Over the last couple of months, I’ve been speaking with the people at my company about what being a broker in a downturn is like and how to keep business going no matter the market conditions. Here is what I’ve been saying:
Absorb The News, But Don’t Wallow In It
This advice holds true for everyone, not just CRE brokers. In today’s world, more “news” exists in more media formats than ever before, and technology allows anyone and everyone to mass broadcast opinions. While it is important to stay well informed, it is equally important not to become overwhelmed. It is important to understand how easily one can become saturated by negativity, and how that will begin affecting how you engage with others.
I’m not advocating sticking your head in the sand. Just be aware of how much time you’re spending absorbing everything that’s going wrong without being introspective about what’s going right. Always remember that no matter how bad things may seem, there’s always something going right.
Deal With Fact, Not Speculation
I see many brokers absorb CRE information from headlines and reporting, accept it on face value and begin talking with clients and other brokers about it. Understand that what is happening in another market or city may not be exactly what is happening in your own market area. Learn what is happening in your market, industry and business by talking with clients and brokers every day about what is actually happening — not just about what they think.
Don’t make the assumption that banks are not making loans just because you heard an example or read a headline about a bank pulling out of a deal. Find out which banks are still making loans and whether or not their criteria has changed. Look at your own deals, and speak with lenders to get confirmation from the source. If your clients are worried about whether their tenants will pay rent, help them by getting facts: Find out from other clients what was actually collected. Focus on what is actually happening in your market, not on what people fear might happen.
Nurture Relationships And Support Your Clients
Don’t talk with clients about buying or selling. Call them to see how they are doing and to hear what they are experiencing. Look at the world through their eyes, and share concern with them. Use this opportunity to be genuine and create a stronger client relationship. Don’t tell your clients they have nothing to fear. Listen to them, and give them the facts you’ve learned.
Just like the advice in the previous paragraph, don’t feed their fears with speculation. Look at and listen to your market, and provide clients with as much data and firsthand accounts as you can. Be the purveyor of actual news. Your clients are people just like everyone else. Be careful not to spin or sugarcoat what is happening. Your trusted counsel is needed more than ever.
Work On What You’ve Been Putting Off
When I was a little kid, my grandmother gave me a small oval plastic change holder with the word TUIT printed on it. When I asked her what it meant, she explained, “Haven’t you ever said, ‘I’ll do it when I get around to it’? Well, now you have a round TUIT.”
Consider that a slowdown in business might just be “a round TUIT,” and see it as a gift away from the day-to-day grind to focus on organization and systems to improve your business. Clean up that database. Research those phone numbers and mailing addresses. Drive your market, and get data from properties. Take the time now to get “around to it” so when business picks back up, you will be in an even better position.
Expect The Best But Plan For The Worst
Own the fact that if we were pessimists, we would be doing something other than brokerage. We are by nature an optimistic breed. Don’t lose that during a crisis. Expect that the current market situation will be over soon enough and that business will return to normal; however, prepare for that to be inaccurate. Cut back everywhere you can in personal and business expenses, and keep as much in reserve as possible.
It’s important to note that many brokers do not plan for the worst. After each downturn I’ve experienced, there has been notably less competition. If you haven’t built up reserves for this one, take a lesson, and start building reserves when the markets return because the next one is always coming.
That’s the advice I have for you from my experience in other downturns. I know you’re probably sick of hearing “This too shall pass,” but the reality is I’ve been through other crises that had way more impact on my business than this one has so far, and all of those did indeed pass. The other one you’re tired of hearing is “You will be stronger for this.” But hang in there and focus on executing a few of the ideas above, and your business and you will be indeed stronger having gone through this. Really.
Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?