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Jeff Lebowski. The Dude. Basically, a screw-up.
So were you one of those who confidently predicted a few years back that real estate was no longer cyclical? If you were, would you admit it today?
I wish now I had cross checked who told me that with those who signed on the bottom line of deals that couldn’t possibly pencil out (Did anyone in the room hear Macklowe say real estate was no longer cyclical?).
Whenever the economy weakens we seem to bring something to the feast, whether it was overbuilding (I’m losing count. I think that was two recessions ago) or sloppy underwriting for assets wildly over-priced. It’s too early to tell now (hell, we’re not even sure if this recovery is going to stick), but when the next recession hits, especially if it comes on the heels of a hot go-go spurt of activity, I wonder where we will have gone off track?
Would it be something in the oversight of CMBS 2.0 or in how we measure fundamentals to justify our disposition strategy? What basic, common sense rule from Real Estate 101 will we ignore to make the next great recession a bit more painful for us?
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John Salustri
John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.
