Last week, I discussed five key lessons that I have learned in my first 16 years working in corporate real estate. Over the weekend, I realized that I should have included an important sixth lesson.
In the wake of the economic crisis that started in late-2008, many executives were wary to make decisions that had long-term implications. Many leases were renewed short-term, even though the market greatly favored tenants, especially those with credit.
At the time, we were representing ADP and the senior vice president of real estate was Art Elman. Art is very high of my list of smartest clients, probably in the top two, and has taught me many lessons about how to structure and negotiate deals. I’ve been known to refer to him as Yoda, the Star Wars character, as he is not only a great corporate real estate executive, but also a great teacher.
In early-2009, I was working on a deal with one of Art’s real estate managers and we were having a hard time coming to a decision, because the headcount kept changing. We arrived at a critical date and needed to make a decision or risk losing our negotiating leverage. The real estate manager and I walked in to Art’s office, presented the information and he made a decision. When I reminded him that the headcount had changed four times in the last four weeks, he said the following:
“Jeremy, we can only make a decision with the information we have today. If the information changes tomorrow, we can adjust, but we can’t hold off on making a decision because it might change.”
It seems pretty simply, but indecision still reigns supreme in corporate America. Either executives are afraid to put themselves on the line, or they simply overanalyze what may be coming down the road. As a service provider, I can tell you that there is very little that is as frustrating as a client that can’t (or won’t) make a decision.
The punch-line to the story is that the headcount did change again. It went down and we needed less space at the 11th hour of the deal. However, since we already had favorable business terms in place, we convinced the landlord to maintain those terms and simply adjust the plan. It all worked out in the end, and I learned a valuable lesson.