A bit sadder and a bit wiser. Even if we skirt the mountaintops, the rocky flight path we’ve taken over the past few months–and are likely to experience for the near term–will leave us with lessons learned. For the great majority of our polltakers (38%) the lesson was Know Where the Door Is; exit strategies are key. Nearly a quarter (21%) of respondents say don’t flinch and Stick to Your Strategy. This compares to the 13% who will keep their strategies loose-fitting and replaceable. Diversification by Product is the name of the game to a sobered 17% while 10% will Diversify by Locale. Zaya Younan, never one to shirk from frank talk, admits he’s learned a thing or two. The chairman and CEO of Younan Properties in Los Angeles tells us what:

“First, some background. The debt-market deterioration was created by a significant failure of subprime residential mortgages. First of all, how bad will the housing recession be? We believe it will prove to be severe, but we have probably passed the worst period. We will only gradually ease out of it over the next two to three quarters.

“Our view, based on the statistics we see today, is that we have begun a six-to-nine-month period of stalled economic activity. And this is more likely to be labeled a growth recession. We’ll flirt with a recession and growth will be stopped but we’ll have positive GDP. We also think the slight increase in unemployment is not significant enough to be a great indicator of what is to come.

“Now, in terms of what it has taught us, naturally when we were financing a tremendous amount of acquisition we were doing a significant amount of CMBS loans, which are naturally tied into a more global economy. When the credit crunch/debt market deterioration happened and Wall Street firms stated to be impacted, we basically saw the origination of CMBS loans diminish from something very large to something very small. Most of our loans were CMBS and we were locked in for a very long time. The treasury-rate reduction will not benefit us because we’re tied into long-term loans with higher interest rates.

“What we should have done is not put all of our eggs into the CMBS-loan basket and done more floating, on-book loans with regional banks that would have given us the flexibility to restructure our loans now rather than live with the loans for the life of our holdings.

“Our economy has a cycle. Some are short and are created by an event. Some are longer and are created by more economic weakness. We need to navigate better and make more short-term decisions. As the market changes outlook we need to change with it and we need to re-measure our strategy and, as necessary, implement a different strategy for those changes.”

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