ınthek[now]
BY Allen Kenney
To Do in 2009: Get Efficient
By now, most of our 2009 resolutions have fallen
by the wayside. Chances are that you haven’t been
exercising as much as you said you would. Your attic is
still as cluttered today as it was on New Year’s Eve.
How many pieces of pizza did you have for lunch?
Heading into 2009, commercial real estate companies
were forced to make their own resolution: hang on to
as much capital as possible. Only, in this case, the
stakes are a little higher than just being disappointed
in yourself if (or when) you fail.
Big loans are coming due for REITs and other commercial real estate companies in 2009 and beyond, to the tune
of about $1 trillion during the next three years. In the past,
companies just turned around and refinanced that debt.
But that’s not an easy option in the age of the great credit
Stephen Swintek/Getty imaGeS
drought. So, conserving cash is critical, and that means
finding ways to create efficiencies.
Like passing on a second piece of pizza or getting out
of bed at 5 a.m. to go to the gym, being efficient takes
discipline and sacrifice. You have to shore up the balance
sheet, so you put your development projects on hold.
You pass on that office building in New York, even if it’s
available at a fire sale price.
Unfortunately, you also can’t be quite as generous when
money is tight, so that means it’s time to hold back a little of
that dividend. Hopefully, the shareholders will understand.
Yes, it’s not as much fun to be saving when you want
to be spending. It takes hard work and willpower. But
change isn’t always enjoyable or easy—ask your friend
who can’t stop smoking.
