Report From The Trenches

Sitting in on a "state of the market" presentation yesterday regarding commercial real estate, a power point slide was put up highlighting the revenue for one of the industry juggernauts, Holliday, Fenoglio & Fowler. This publicly traded, national investment sales firm is rumored to be off almost 90% in revenue from just two years ago. The terrifying aspect of this is that business is not slated to improve for at least two to three years in the industry and is expected to never return to the level of volume as seen in 2005-2007.

Unfortunately, this example is no exception but rule. The industry's largest players, CB Richard Ellis and Jones Lang LaSalle are bloated with debt after a costly merger and acquisition period and smaller, regional players like GVA Advantis out of Virginia are closing down for good.

At the helm of GVA was Washington, D.C. real estate mogul Jeff Neal - former co-founder of Monument Realty, the now infamous partner of Lehman Brothers in the Watergate Hotel deal. For ten years Monument was the hot hand in the region led by the unflappable Neal and his partner Michael Darby.

In a recent interview with Biz Journals Neal was humbled in this candid excerpt:
"For weeks, months, I’ve been not sleeping and kicking myself for not doing better,” Neal said, shaking his head quietly at a conference room table in the company’s 11th floor offices along Pennsylvania Avenue. But, short of designing and patenting a crystal ball that could predict the uniquely unpredictable economic collapse, he’s not sure what he could have done differently.

The lesson from all of this is that the economy, the deals and the players are changing and even the most well heeled veterans are forced to cut their teeth all over again. Foresight, determination and the courage to think differently are all there is to fall back on.

As professionals in all disciplines of real estate continue to leave the business, it has gotten so bad that even veterans of the industry with graduate degrees are unable to obtain volunteer positions.

Although some did see the collapse coming, it's no time for bragging rights but a moral call to be courageous in educating others on what is to come. However, like on an airplane going down, secure your own oxygen mask first before assisting your neighbor.