Real estate may be finite, but that does not mean real estate investments provide infinitely positive returns.
That does not mean any real estate developer can be successful, or that standards – of personal ethics and professional excellence – cease to matter in this particular world of investing.
On the contrary, the events of the Great Recession (and the subsequent collapse of the residential real estate market) should remind us that no group is immune from the inevitable; no entity can escape the inexorable forces of emotion and reason; no individual can avoid the fallout from panic, by sellers, and the rigidity of math, as it relates to the deflation – the puncture and burst – of a bubble.
I return, then, to the commentary of Carlos Imery, Principal of IG3 USA, a leading commercial real estate investor:
“Markets can display extremities of mania and depression, regardless of the emphasis on computerized trades, customized algorithms and an abundance of data. Irrationality is a greater power than the purported rationality of the marketplace, because if the opposite were – if the numbers were always right – we would not have any economic volatility.
“The best way to maintain your direction in such conditions is to safeguard your principles: To never yield to fads or headlines; to stay true to the history of your brand; to preserve the traditions responsible for the respect your business enjoys; to defend the concepts that make for sound real estate investing in times of plenty and periods of austerity.”
I once again find myself in agreement with Mr. Imery not because I want him to be right, but because I know his assertion is right.
I see brands in and outside the real estate industry that have a similar philosophy – and those organizations continue to thrive.
Call it leadership or vision.
Call it whatever you like, but emulate it the best way you can.
(Disclaimer: I am not an employee of, an investor in or a consultant to any company referenced in this piece. I maintain a strict code of professional independence, free of any conflicts of interest.)