Commercial Real Estate Brokers Charting a New Course in a Crisis Market

This is part of an ongoing retelling series on The Commercial Real Estate Tsunami: A Survival Guide for Lenders, Owners, Buyers, and Brokers by Tony Wood (ISBN: 978-0-470-63637-4, John Wiley & Sons, 2010), with a foreword by Matthew Anderson.

Previous post: Buyers Beware: Hidden Debris

If you’ve ever worked in sales during a downturn, you know the feeling. Your phone still rings. But nobody wants to buy. They just want answers.

That’s exactly where commercial real estate brokers found themselves in 2009. Tony Wood describes it with painful clarity in Chapter 9 of The Commercial Real Estate Tsunami. Business was off by 70 percent across the board. Sales had stopped. Leasing was crawling. And the old playbook of “smile and dial” was about as useful as a screen door on a submarine.

The Four Phases of a Recession

Wood brings in Tom Loeswick, a business coach from Shirlaws with 25 years in commercial real estate, to help frame what brokers were dealing with. Loeswick breaks every recession into four phases:

• The Down - the sharp correction where everybody loses money fast
• The Drag - the flat period where the market bounces around but never really recovers
• The Release - a retest of the previous low (basically, it gets worse again before it gets better)
• The Up - the long upward trend that eventually follows

The key insight here is that most brokers were stuck in the Drag period trying to sell “boom services” in a recessionary market. They were offering the same products they sold when things were hot. But clients didn’t want what they used to want. They wanted help cutting costs, restructuring leases, and figuring out whether to walk away from bad deals.

Stop Selling What Nobody Wants

This part hit hard. Loeswick argues that brokers need to completely repackage their service lines for the current market. Instead of pushing sales and new leases, focus on what people actually need right now:

• Tax appeal and expense management services
• Lease restructuring (blend and extend deals)
• Lease termination or surrender help
• Debt restructure assistance
• Equity restructure guidance

It’s so obvious when you read it. But in the moment, most people just kept doing what they’d always done. Harder. Faster. With more cold calls. And that approach didn’t work because the market had fundamentally changed.

The Volume Problem

Even after repackaging, there’s another issue. Fewer deals are happening. Period. So brokers need to think about two things differently.

First, positioning. You have to stand out. When every broker looks “about the same,” clients pick based on price. And competing on price in a down market is a race to the bottom.

Second, volume. The old one-to-one approach of cold calling and referrals doesn’t generate enough prospects when everyone is sitting on their hands. Sales ratios change during downturns. Clients are less decisive. Waiting feels easier than acting. So you need to cast a wider net to find the few people who are actually ready to move.

Don’t Just Survive. Reposition.

Here’s the part that really stood out to me. Loeswick talks about risk profiles. Some people are comfortable investing early during a downturn (6-8 on his risk scale). Others are risk-averse (below 5) and wait too long. The risk-averse crowd almost always loses market share in the recovery.

He uses a great example from Silicon Valley. In 1991, the market had about 900 brokers. The phrase going around was “stay alive until 95.” But by mid-1994, only about 300 brokers were left. Two-thirds had left the industry entirely.

And here’s the kicker. Some firm managers thought their only job was to survive the downturn. But that’s only half the story. If you’re the number three firm in your market and you spend all your energy just surviving, you might come out the other side as the number five firm. Meanwhile, the firms that used the downturn to reposition themselves grabbed market share that they kept for years.

Finding the Opportunity Gaps

The chapter gets really practical when it talks about where the opportunities show up during recovery. Markets shrink the same way they grew, just in reverse. So you can reverse-engineer where the gaps will appear:

• Positioning - which competitors will fail or pull back? Which owners need new broker relationships?
• Distribution - what new channels can feed you better leads?
• New products - what services become relevant with shifting ownership?
• Geographic expansion - can you hire displaced talent or acquire struggling firms cheaply?
• Bundling - can you package services differently to stand out?
• Client upgrades - can you drop unprofitable clients and focus on making your best clients into referral sources?

Loeswick recommends picking no more than three of these to focus on. Don’t start a fourth until the first three are done. Build a clear vision, strategy, and implementation plan for each one.

My Take

I think this chapter is probably the most practically useful in the entire book for anyone in a sales or brokerage role. The advice isn’t complicated. But it requires you to stop, take a breath, and actually change what you’re doing instead of just doing the same thing harder.

The biggest lesson? Downturns aren’t just something to survive. They’re when the market reshuffles. Old relationships break. New ones form. The guard changes around who controls debt and equity. If you position yourself early, you catch the first wave of recovery when resources are cheap and the market makes its biggest moves.

If you wait until things feel safe, you’ve already missed it.

Next post: How to Ride a Tsunami with Expertise