I just returned from a trip to Toronto, where one of the highlights of my trip was the Schulich Real Property Perspectives Lecture featuring Bruce Flatt, Senior Managing Partner and CEO of Brookfield Asset Management Inc. Brookfield is famous (at least in my mind) for their 2002 purchase of the World Financial Tower in New York previously owned and occupied by Lehman Brothers. Nobody wanted to touch the assets in downtown Manhattan after 9/11 and Brookfield picked it up from Lehman at $140 per square foot, or something ridiculously low like that. It was well below replacement cost. And today it’s part of one of the world’s most coveted office complexes. It was a move made with vision – an ability to look through the negative news and plan for the future.
The room was packed with a diverse crowd from Toronto’s real estate industry…Bruce Flatt was a big draw with a message everyone needed to hear. The market isn’t always going to be like this. Have a strategy and follow it. Prudence pays off. In his view, real estate almost always returns to it’s replacement value. Yes, you’ll value it based on comparable properties and it’s income… but as the market moves up and down, you should always keep replacement value in your mind when you make your decisions.
Bruce reminded us that the market is never as bad or as good as the papers say it is, AND that decisions made with prudence will be more profitable because you’re acting while others are frozen in fear.
Thank you Bruce! And thank you Seth Godin…he’s echoing this message with a slightly different spin (yes, I am on a serious Seth Godin kick these days, but he sent me a FREE copy of his newest book TRIBES!! How can you not talk about someone that sends you a free book?!). Seth is talking about the negative messages in the media. But he’s commenting on the potential impact it could have on productivity as company’s trim back their budgets:
The media lemmings, the same ones that encouraged you to get a second mortgage, buy a McMansion and spend, spend, spend are now falling all over themselves to out-mourn the others. They are telling everyone to batten down, to cut back, to freeze and panic…The three biggest expenses of most endeavors (the energy to make it, the people who create it and the marketing that spreads the idea) are about to be overhauled.
What a tragedy it will be if we let defensive thinking hold us back. <Read the entire post here>
So, with both Bruce Flatt and Seth Godin trying to get us thinking about what we are doing today to be profitable, productive and just all around better tomorrow than we are today, are you sitting on the sidelines afraid or are you doing something today to make tomorrow better?