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Bottom of the Bathtub or Down the Drain

Until 6 weeks ago, there was anxious anticipation that we would soon “hit the bottom of the bathtub,” bump along for a while, and eventually bounce back and be on the road to recovery in ‘09, albeit slowly. Well, the past 6 weeks has produced a profound change, and the mood has shifted from somber to seriously concerned that a recovery is “years” away. The carnage on Wall Street continues to pound the REIT sector, with stock prices at levels that defy any rational explanation other than a market out of control. The by-product is that organizations that have been holding the line and avoiding significant staff reductions, are now putting a knife to the organization. As an example, last week First Industrial made a big move and cut its CEO along with a large percentage of its investment and regional organization. I have heard on a number of fronts that, over the next month or two, more cutbacks among principal organizations will occur, slicing between 10% to 20% of their staff. Notwithstanding the gloomy view within the eye of this storm, I believe that we are at the bottom of the bathtub, and sometime soon after the election, markets will begin to settle down and we’ll begin to have a more positive view of ’09. Wishful thinking? I hope not.

Tony LoPinto is CEO of Equinox Partners, an executive search firm specializing in the real estate industry, and parent company of SelectLeaders. The views expressed in this article are the author’s own.
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