At Closing - Getting Back to the Basics…
By: Lawrence A. Pobuda, partner, Stewart Lawrence Group
During this economic downturn, many people talk of "getting back to the basics"…you know, things like minding the rent roll and focusing on our tenants. I’m not sure it’s fair to say that we ever lost focus on our tenants during the overheated days of cap rate compression and ever-increasing property values, but I understand the concept of "getting back to the basics."
It strikes me that this same phrase applies when it comes to the responsibility we share in building great relationships with our elected officials. I’m not going to chide you with "make sure you get to the polls in November" – I’m assuming we are already doing that. Instead, I’m going to encourage you to treat your elected officials the way you treat your valued tenants – with frequent visits, great communication and an eye toward building a trusted relationship.
First, we have an obligation to do more than show up at the polls, vote and hope that the majority of other voters prefer the same candidates as we do. How many of us, in pursuit of a prospective tenant, would be satisfied submitting a proposal and waiting to hear back from them with their decision on which building they have selected? Most of the successful landlords I know "work" a deal – we get to know the prospect, we underwrite their business and we tailor our proposal in a way that highlights the value of our property. In other words, we build a relationship.
So too, is it important with our elected officials. We need to engage them in discussion to impact outcomes. During my travels this year, especially the past six months, I’ve heard complaining about our elected officials – and I understand the frustration. As a matter of fact, I do my share of complaining about government decisions.
Yet, what I found during this year is the satisfaction of communicating directly with my elected officials – engaging them in a dialogue of the key issues and challenges – especially those affecting our communities and our commercial real estate industry.
We have the responsibility to inform our elected officials of the happenings in our industry – our key challenges and opportunities. Our representatives and senators are busy people – their electorate expects them to be informed about all issues – business, international affairs, climate change, etc. This point was driven home to me earlier this year when we met with leaders of the U.S. Senate Democratic Caucus, and were stunned when a senior senator asked us, "What does CMBS stand for?"
Finally, don’t assume that your congressman or senator isn’t interested or won’t be willing to hear your perspective on a key issue. For example, your representative may support increasing carried interest taxation. That doesn’t mean you shouldn’t contact him/her and have a meaningful conversation about why you view it differently. A well-articulated counter perspective may not change a vote, but it may change the fervor with which the senator is willing to advocate legislation. It may be the difference between raising the carried interest rate to 25 percent instead of 35 percent.
Keep in mind, if we don’t engage our elected officials in this dialogue, we can be sure that our competition will. During this election season, think of your relationship with your elected officials as analogous to that key tenant with a 100,000-square-foot requirement: We want them in our building and not that of a competitor.
Time to get back to the basics!