Real estate pros told to reinvent themselves

You know it’s bad when the economist says commercial lending is off 70 to 80 percent and the other panelists say you’re being optimistic.

“Patient money? Boy is it patient. Everybody’s sitting on the sidelines to see what happens,” said Whitney Knoll, senior managing director in the Atlanta office of Holliday Fenoglio Fowler, which arranges commercial financing. “Everybody is afraid to make the first move.”

Knoll spoke Monday at a panel discussion called “Back to Living on Ramen Noodles: Practical Tips for Surviving in Today’s Economic Environment.” The forum was part of the International Council of Shopping Centers Southeast Conference, at the Georgia World Congress Center.

Credit evaporation has put an end to deal-making, forcing many real estate professionals to ask, should I stay or should I go?

For those with a passion for real estate, staying makes sense, provided they’re prepared to work differently, the panelists said.

“Think about what everybody else isn’t doing and go do that,” suggested Steve Tart, partner and executive vice president with Ben Carter Properties.

Shawl Pryor, senior vice president at Infinity Property Management Corp., said his company underwent a restructuring that resulted in employees taking on dual roles — property management and leasing.

“I filled a pothole at one of our shopping centers,” Pryor said. “We’ve got to reinvent ourselves as the times change.”

A downturn leaves ample time to get to know tenants better and to make new connections, the panelists said.

“The people that are out there making calls will be the first people to get calls back,” Tart said. “Relationships that you build will be everlasting. There’s no amount of money that can buy those.”

Commercial transactions are off 65 to 70 percent since last year, Knoll said.

“Retail follows housing,” he said. “It is a very, very dramatic falloff over the past 18 months.”

The current environment clearly is a recession, one created by the residential real estate collapse, soaring energy costs and the absence of credit, explained Roger Tutterow, Mercer University economics professor.

But Tutterow said housing is likely to stabilize soon and oil prices have declined, so there are glimmers of hope.

Premium commercial properties are eliciting buyer inquiries, although deals are few, Knoll said. “We see money saying they’re interested in getting back into core areas,” he said.

“I say stay in the game — it will come back,” Knoll said. “You cannot find a better area to create wealth than real estate.”