Mckinley's Berriz: Investing In People Pays Off In Tough MarketsSeptember 23, 2010
Midwest Real Estate News: How has McKinley made it through this rough commercial real estate market so far?
Albert Berriz: First of all, it helps to have some perspective. Ive been in this business a long time. There have been similar down times in commercial real estate throughout the decades. People think this is unusual. Its not. All of the other down times in this business have taken several years to work themselves out, too. People sometimes lose touch with this.
The reason weve stayed successful during these times is because of our people. If you go through our operation, youll find executives that have been with us for 10, 20, 30 years. That experience helps. I also require that all of our executives also be excellent operators. You cant separate the two. If you buy a building, you have to know going in how to operate it.
MWREN: Were always looking for signs of hope in this market. Do you see any positive signs as you look at the commercial market across the country?
Berriz: I do see the end to this market. But the end is not near. I dont see a turnaround until 2013 or 2015, and Id lean more toward 2015. If you think about it, though, while this may be a protracted downturn, its not an uncommon one. We saw similar downturns in the 70s and in the late 80s. Of course, a lot of people working in the business today were not in the business during those down times. They dont have the perspective that people with more experience have.
MWREN: It seems, then, that these protracted downturns are simply a symptom of the commercial real estate business.
Berriz: You cant have a period of six- or seven-year growth without eventually having a downturn. Its inevitable. The real estate business always features that cycle of ups and downs. This is my fourth recession. Im not uncomfortable with them. We expand our business in down times.
MWREN: How do you grow your business in the down times? What steps do you take before they hit to make sure youre in the position to do this?
Berriz: I invest in people. Thats more important than any investment you make in real estate. Its the investments we made in people in 2000 that prepared us for what is going on now in 2010. We have such longevity in our ranks. We have leaders in position who have been with us for decades. Having superior leaders and people leads to growth for your company.
MWREN: When you look at the Midwest in particular, do you see any markets where we are seeing at least some improvements in the commercial real estate business?
Berriz: We are seeing a resurgence in parts of Indianapolis. We are also seeing a cautious resurgence in parts of Chicago.
MWREN: If you were talking to someone working in the commercial real estate market who was depressed about the current market, what would you tell that person?
Berrriz: I would tell them that this is the best time to grow professionally or to grow your business. I know that we are looking for smart, hard-working people in this market.