Log of Lessons Learned - Part 2 Deals

Logs Of lessons learned.jpg


  • Just because rents have gone up 5% per year for the last 5 years doesn’t mean they can’t go down 25% in one year.
  • Lease first, then build.
  • Control your inventory.
  • The easiest sale is to another salesman.
  • Have an ongoing asset disposition program in good markets. Sell something…. Not every asset or building can be a core holding.
  • Sell when the market is good because when the market is bad, there are NO buyers… at any price.
  • Holding off on selling based on last year’s prices or what your pro-forma said is stupid.
  • Do not follow the market down…. Lead the market. Make cuts quickly.
  • Work renewals hard and early.
  • Beware of tenants with good stories…. Be skeptical.
  • Don’t let what your competition is doing influence your decisions.
  • Do what you think is right based on the facts. You can’t erect a fence to keep the competition out.
  • It’s better to start a building two months late and miss a deal than to start it two months early and face a shrinking market.
  • Secondary locations can sit empty no matter how low rates go.
  • No credit, no deal.
  • New projects must be based on current rooftops and existing infrastructure, not future population growth.
  • Do not inventory land at retail prices for future projects. A 20% increase in land price is only a 2-3% increase in total project cost.
  • Do fewer deals and do them better. You can be more profitable by having more time to focus on the few and you get the added benefit of keeping overhead low.
  • Too many deals dilute time and attention away from the good ones.
  • It takes 5 good deals to make up for one bad deal.
  • When a bad deal surfaces, 90% of management’s time is siphoned off from the rest of the business to deal with the problems of the bad deal. The result: The bad one is still bad and the good ones are now mediocre or troubled as a result of a lack of attention. 90% of management’s time should be spent on nurturing the good ones. Easy to say, hard to do.
  • The first markdown in price is the smallest. The mistake is to hold off on selling at today’s prices in the belief the market will come back.