Robin L. Webb, vice president and managing broker in the Orlando commercial division of Arvida Real Estate Services and George Livingston, founder/chairman of Realvest Partners Inc., spoke with GlobeSt.com on their strategies in coping with a potential recession.
Webb says, "It has has always been our practice to approach each new year with some caution. As the year 2000 began, we assumed somewhat of a defensive posture with respect to expenses and profitability, along with the reallocation of some assets to expand our client property marketing campaigns."
The Arvida executive says, "the year ended with a dramatic improvement in our bottom line and with a 12% increase in the average size of our Central Florida commercial transactions."
He adds, "While we have, again, prepared for some slowing in the velocity of transactions, productivity in the month of January actually reflected improvement over prior years. As a subsidiary of publicly owned St. Joe Co., we are unable to project or predict revenues.
"However, Arvida Realty Services commercial division has again returned to somewhat of a defensive budgeting position with the allocation of operating expenses for the year 2001, while, in light of the probability of more competitive interest rates, anticipating an excellent year for sales and leasing."
Livingston of Realvest Partners says the first task in preparing a real estate plan is to estimate growth rates. "Potential highs and the more statistically probable lows should both be considered when guaging the number of employees anticipated and space for equipment and procedures," he says.
"Good real estate planning can minimize real estate expenditures and increase efficiency while it helps to shape the corporate culture and creates value through direct contributions, appreciation or through lease backs," Livingston says.
He adds, "We ask ourselves, how many people will be needed? Where will their offices be located? How much freedom is there to expand? What sort of amenities are available for workers? What sort of communications and energy infrastructure will be necessary?"
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