An Ugly Year for Commercial Real Estate Professionals
AMB just recently announced that they will lay off 22 percent of their work force. First Industrial laid off something like a third of their salaried work force. Anecdotally, I’m seeing both commissioned brokers and salaried professionals being laid off left and right - it’s ugly out there.
The only way to hang on to your job in this environment is to be a net revenue generator - not an expense. And with “desk costs” (the overhead associated with keeping someone employed) often in the six figure range, you’ve got to create a lot of revenue just to break even.
A lot of firms are trying to create that revenue by creating consulting practices, i.e., consulting on distressed property. I just don’t believe there will be enough fee income to be had there anytime soon.
I do believe that the volume of distressed sales will ramp up considerably in 2009 which will be a boon for investment sales brokers that made a lot less money than usual in 2008. I foresee capitulation from sellers that were trying to hold onto 2007 pricing levels and didn’t get their sales done. The forced selling has begun!
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Tags: Commercial Real Estate, layoffs
