New Year’s Resolutions

This new year brings promise of further economic improvement, but as I noted last month, it brings ample challenges, as well. Improving occupancy, more widely available financing and renewed development all offer cause for optimism, yet we also face re-emergence of the national debt default threat and a likely rise in interest rates. Federal government decisions may be out of your control, but your decisions can make a difference to your company, your community and the industry at large. So as you determine your strategy for 2014, I invite you to consider some resolutions that may provide food for thought:

■ I will dig deeper but make smart deals. As prices rise in gateway cities, investors are increasingly exploring secondary markets, and more financiers are open to considering deals there. It’s great to close deals, as long as they genuinely make good business sense. Don’t lose sight of an asset’s real performance and potential.
■ I will keep interest rates in perspective. Interest rates remain far lower than historical norms. Remember this as they start to rise, but don’t weigh them too heavily in your investment decisions; ultimately, the price of the property is still the price of the property.
■ I will stay disciplined. Whether you’re an investor, a financier or a real estate corporation of any type, excessive debt and too-tight spreads in past upcycles have caused trouble. Whatever your company’s financial strategy, and no matter what direction the market takes, it is prudent to watch your LTV, corporate debt and DSC levels.
■ I will think creatively. Office tenants are taking less space and using it more efficiently, while also regarding that space as a recruiting tool. Multi-family residents want more amenities. The Milennials and Baby Boomers stand at center stage, shaping the market with their vast numbers and distinctive tastes. In this climate, fllexibility and ingenuity pay off.
■ I will evaluate new trends and focus on those that seem lasting. Fads come and go, but some trends today have staying power, among them sustainability, e-commerce and the rise of tablets and smartphones. Embrace the changes that promise fresh opportunity for your business and make your offerings unique.
■ I will pay it forward. Contributing to the community can bear fruit for your business, whether you choose designs that genuinely improve the environment rather than just rack up points, incorporate more than the minimum number of affordable units in a residential development or pitch in with funding for a much-needed municipal project.
■ I will take care of clients, customers and employees. No matter what happens, if you remember who’s most important to your business, it will pay off!

Of course, these are just a few suggestions. If you have other resolutions that would benefit the industry, click here to post a comment on Facebook or go directly to our Facebook page. We’d love to hear them!

Suzann D. Silverman, Editorial Director