So, What Do We Do, Now?
Got a call last week from a fellow commercial real estate broker friend. Although, we talk on the phone, I haven’t seen him in a couple of years. He was wondering if I was going to attend a meeting of local commercial agents that happens every few weeks. Though I said I’d go, I forgot I had made a previous commitment; so, I didn’t go.
Anyway, feeling a bit guilty about not going to the meeting, I gave him a call yesterday and we met for lunch. Not one of those fancy 3 Martini lunches that many people envision when they think of real estate agents getting together. No, we had a couple of $1 meals and a glass of water at a local McDonalds. Regardless, it was good to see my old friend.
Anyway, after catching up on family and personal stuff, the subject inevitably turned to business; more accurately, the absence of business. We both observed there is a virtual absence of financing for commercial deals, as well as a massive and growing backlog inventory, especially the rapidly exploding inventory of properties where the owner is upside down on their value to debt.
We talked about the undesirability of dealing with short sales because of the problems caused by the lenders; they’re either unprepared, unable or unwilling to pull the trigger on making a decision on a deal in a reasonable time frame, etc., etc., etc. We also talked about the growing problem of the increasing number of brokers and agents who aren’t making enough money to pay their business overhead AND their personal expenses; and, that the number of companies and active agents are dropping faster and in greater numbers than Democrats not seeking re-election.
Then, we got to speculating; What would WE do if we were placed in that position? That’s when the atmosphere became both hysterically funny, yet somehow scary.
My friend had no idea of what else he would do, since he never really gave it any thought.
As for me, I have a great diversity of real estate related experience, so I really never gave it much thought either. But, pressing myself into that imaginary circumstance, I said, flippantly, “Well, I could always go back to music,” which startled my buddy.
I explained to him, that in my youth, I was actually something of a rock ‘n roll “star.” I was a professional musician and singer since the time I was about 13 years old, made my first commercial recording at the age of 14 years old, and became a full-time professional musician at 18 years old. I worked as a studio musician for a production group in New York that produced a number of top 10 and top 20 hit rock ‘n roll songs during the 1960′s and beyond.
This information shocked my buddy, who always thought of me as a real estate geek; a guy who analyzes income & expense statements, writes leases and sales contracts, does marketing stuff, and the like. He never imagined me as a long-haired music freak (Probably because I don’t have much hair left, and it certainly isn’t long, anymore).
But, all this personal stuff aside and turning to a more serious tone, we acknowledged, there are lots of real estate people who are not in the business anymore, and many more who are going to leave the industry because they just won’t be able to survive financially. And, recognizing the coming tsunami of commercial foreclosures, we came away from our lunch with a bit more subdued outlook, and that terrible question facing numerous real estate agents . . .
So, what do we do, now?
