April 2011

Recovery — or maybe it’s really recommitment

As seen in Chicagoland Office & Commercial By David A. Petersen, RPA
CEO
NAI Hiffman

 

Since last year, the word “recovery” has made its way into our headlines and newscasts more and more frequently. Unfortunately, real-world circumstances are complex and unpredictable, and the clean ascending line on a graph we’d all like to see is more of a tenuous, wavering scribble. Collective wishing is a heartwarming notion, but it has become clear that our situation requires more concrete solutions.We are experiencing a lack in fiscal leadership from both sides of the aisle; to listen to press accounts is a daily exercise in frustration. No amount of financial facts, jobs and housing statistics, cap rate quotes, or line graphs will give the true sense of my take on our industry as it is today.

Waiting for a crackerjack cure-all idea from the government to provide a spark will have us sitting dormant for a long, long time. Attempting to force recovery through more spending has been a hollow effort. History has proven that true economic recovery occurs only when government gives business leadership the breathing room to take positive steps centered on innovation, creativity, and hard work. We need politicians to lead into the wind rather than move where the wind blows them. There’s a word for doing the same thing, the same way, with the same people, and expecting a different result, and it’s not “recovery” — it’s “insanity.” My favorite bumper sticker at the moment remains, “It’s the spending, stupid!”

Despite the trepidation that has pervaded the real estate management industry for the past three or four years, there is great news: Our recovery is happening now. The need to seize this moment is critical to your career and the future of our industry.

Educators call it a “teachable moment” — a time when conditions transpire to create an opportunity for positive change. These times have caused those companies committed to the property management services business to look at doing everything differently. Industry leaders and valued team members are focusing on restructuring business strategies, reorganizing, creating new deliverables and rebuilding teams and talent pools. These actions have and will directly benefit third-party owners of real estate.

The roadmap to improved deliverables and consequent success involves securing the best people in the industry, committing to new technology that improves efficiency, and pioneering new methods of communicating with our customers. Our world in 2007 did not require this mindset; the industry of the foreseeable future demands it.

Some of our competitors’ short-term strategic plans have attempted to improve margins by saving money on headcount and cutting back on resources. Conversely, firms fully entrenched in the services business and looking at the road ahead are spending money and investing in resources, being proactive to both differentiate themselves and better serve their clients.

In my opinion, our industry is in full recovery mode now. Look at the firms moving ahead in our Chicago market: we are delivering more information and faster results, our internal communications are more efficient and effective between disciplines, and our teams are aligning better with customers. As a company, there is a cultural realization that each business group plays a role in filling real estate vacancy and increasing NOI in service of our clients.

A company that is not initiating strategic steps to improve services is not taking advantage of the recovery environment we are experiencing. The question for leadership is not, “How long can we hang on until things get better?” — but instead, “If not now, when?”

Our national financial economy is certainly alarming, but our specific industry is ripe for innovation. There is no better time to reinforce and reposition management services teams to win new business and take more market share. When this industry turns around as it has in prior cycles, there will be expansion of leasing, sales of assets and, believe it or not, even new development. Now is the time to be growing and retooling for the fiscal recovery you plan for your business.

There’s a saying that goes, “Don’t dress for the job you have, but for the one you want.” Don’t be the company in jeans and t-shirts when your competition is wearing suits and ties. By the same token, do not let the negative noise out of Washington D.C. or the panicked din of the stock markets cause you to sit back and wait for a recovery to be delivered by some government program or plan.

The property management recovery is staring you in the face today. We can be the industry leaders who not only prepared for a post-recovery economy but served as active catalysts in its rejuvenation.

As a profession, we are always preparing for the future lease up, vacancy, capital improvement, or some other event that happens within the lifecycle of real estate ownership. Day in and day out, we prepare for and predict the future for our customers. Isn’t it time we do the same for ourselves and our industry as a whole?

Recommitment to our industry’s improvement provides the strong foundation for a recovery that ultimately will be felt, not by measuring decimal points and examining stock market fluctuations, but through the continued growth of our businesses and of the assets entrusted to us by our clients. In short, we won’t need headlines to announce the arrival of “recovery.”

 

David Petersen is CEO of NAI Hiffman and also serves as CEO of NAI Hiffman’s Asset Management Group. David focuses on identifying and aligning his client’s requirements with strategic business, financial, and operational objectives through portfolio leasing and management services in order to achieve each clients’ goals.You may visit their website at www.hiffman.com.

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