Getting Over It

Here are some pretty sobering statistics regarding the current state of the commercial real estate market in Nashville:

Number of commercial closings in Davidson county in the first quarter of:

2006: 202 (16.8 per week)

2007: 140 (11.6 per week)

2008: 41 (3.4 per week)

2009: 17 (1.4 per week)

From the first quarter of 2006 to the first quarter of 2009, Davidson County experienced a 92% drop in the number of commercial closings.

For a broker starting his third year in commercial real estate, statistics like these are a little frightening.

Yesterday, my dad sent me an article written by Thomas J. Barrack, Jr with Colony Capital. The article is entitled Get Over It, and it really changed how I think about the current state of the market.

Below are a few excerpts that could apply to anyone in any business:

We are all grieving over the loss of "upward only" lifestyles and the David Copperfield-style disappearing act of our net worths and savings. Even more frustrating is that we all feel that it was not "our" screw up. We were lured into a false sense of security and aspirations of wealth accumulation by the cosmos. It just happened!!! We were all hit by a pandemic economic plague, not by sniper fire, so we are left without a rationale, reason or an understandable cause.

However, the ability to cheer up and get on with life does not rest in the plethora of governmental programs enacted to ease our economic pain, or in the well-intentioned commentary of pundits on the history and future of financial engineering and statistics. The solution rests in first, immediately adapting and surviving so that we are around in order to, secondly, understand what information is important and how that information is harvested.

The world is changing at warp speed and we need to focus on going to where the puck is going, not where the puck is. Wealth is created by keeping a calm mind in the midst of instability and volatility in markets that do not lend themselves to conventional analysis.

The realization we must accept is that the game will now be played in inches and without the knowledge or concern of where the goal line may be. People need to be motivated, free from the horrors of the past and uninhibited by a possible failure of the future. The future will be determined by our continued trust and belief in people and relationships and enabling them to do what they do best. The key for all of us is to produce players not spectators – they will find the goal.

This blog gets its name from a quote of Sir Winston Churchill. Mr. Barrack's article reminds me very much of another Churchill quote, which defines the difference between an optimist and a pessimist: "An optimist sees opportunity in every danger. A pessimist sees danger in every opportunity."

This is a time for realists but it's also a time for optimists.

It's time for us all to get over it and get back to today's business.