Category Archives: Career

What do you do when you have done all you can do?

Career, Family, Life

This is a serious subject so I will start with a silly example. I am too fat and I know I need to lose the weight. Therefore I know I have not done all I can do because it remains visible every morning in the mirror. ha. My point is there are some things and situations where we cannot say we have done all we can do but there are also other situations where you have done all you can do. The question is what do you do when you have done all you can do?

The list is long but several situations that come to mind. You have done all you can in your marriage, you have done all you can to change your husband. You have done all you can medically. You have done all you can to help your child. You have done all you can to get rid of anger, jealousy, strife, resentment yet it is still a part of you. You have done all you can to fix a relationship. You have done all you can to improve your job situation etc etc. Again, this list could go for several more pages.

The bible says that once you have done all you can do to stand, stand therefore. Pretty simple right? When you have done all you can, that is all you can do. If I was writing that passage of scripture I will add at the end, stand therefore in him. What I mean is to stand in his grace, his plan, his forgiveness, his favor, his anointing, his wisdom and his understanding. When you have done all you can, do what the bible says and just stand therefore and rest in knowing God is in charge.

As equally with answering this question I think you also have to answer the question, what I do not need to you when I have done all I can. That answer is to give up. You don’t give up and you don’t go out and make some foolish decisions just because you can. You stay firm and stand firm. I am not advocating that a spouse should never leave a marriage. There are some situations that you cannot fix. What I am mainly talking about is the restlessness that comes during the period between doing all you can do and seeing the results.

So when you have done all you can do, I say, stand up (literally and metaphorically) and poke your chest out and say, By God I am here and I am not going anywhere. KT

Treating each other like you want to be treated

Career, Life

I am dealing with a situation with a friend and business colleague that has stumped me. This person will not call me back and if he does, it is after I leave 4-5 messages. This is not a situation where I am trying to sell him something. We are actually engaged together in a project. Ha.

At first blush most people would just stop calling and consider the relationship over. I am choosing to use this as a teaching and learning project. When someone will not call you back it is usually due to one of two reasons. (1) They don’t respect you, or (2) they think they are too important to be bothered. You cannot make someone respect you so I want to deal with the second reason. Sometimes people get to the point in life where they think they are important enough, smart enough, and successful enough that they shouldn’t follow some basic common courtesies. This is what I want to talk about. I call it the “Bob” factor.

When I started selling hotels, the very first person I called on was Bob who owned a little Days Inn hotel in McDonough Georgia. Bob is a smart guy and clearly knew I didn’t know what I was talking about and I didn’t even have a business card. He could have brushed me aside. He didn’t. He took a half hour and talked with me as though I knew what I was doing and showed an unwarranted amount of kindness and respect to me. That meeting with him made a deep impression on me and one that I have never forgotten. Even to this day, I try as best I can to call everyone back regardless of what they are selling and it is because I want to show them the same kindness Bob showed me that day.

I believe people will reap what they sow. there is a verse in the bible that speaks to this very subject. If you are disrespectful and ugly to someone today there is a good chance you won’t reap that back today. That said, I believe there will be a day when you will grasp this concept because that will be the day you are treated like you treated others.

Status, money, lifestyle and health can change and it can change quickly. Today you may say, I don’t need to be kind or show respect because I am above it, but there will be a day when you will look back and long for someone to show you respect and be kind.

A smart guy once told me, never put something in writing that you would be ashamed to read aloud in court. Pretty good advice. I would add that you should never treat others in such a way that you would be ashamed to have it exposed in public. Sow (treat others) like you want to be treated because as silly as it may sound, the crop you sow is the crop you will reap. When you look at your “field” of life and what you have sown, you will one day find yourself standing on the back porch of life watching that crop you sowed come to harvest in your life. KT

Last look

Career, Family, Life

In the movie Mr. Holland’s Opus, Richard Dreyfuss had been a band teacher for some 30-35 years in the same band room at the same high school. The movie has him being downsized after a long career. On his last day he was cleaning out all his personal effects and putting it all in boxes. After all the boxes had been packed and carried to the car he is leaving his band room for the last time. It shows him walking to the door and reaching to turn off the light and he pauses and looks back at the band room with what I call the “last look.” He is remembering all the times and all the memories of his life that were captured in that room. It is that last look that I want to talk about.

When I think of retiring, its scares me. I mean it really scares me. The idea that one day I will have aged beyond being effective is an idea that is very humbling. We all know that day is coming and there isn’t any way to go around it. One day it will be that day. I have watched many older folks in my line of work force themselves to stay longer than they are effective and I refuse to be one of those people.

This last week I was going into a presentation in Dallas and had some time before the meeting began so I was sitting there drinking some coffee and thinking about these things. All the people in the office were early 20’s to late 30’s. As I watched them all go about their work I knew that one day, it won’t be me in that meeting. It will be the generation behind mine.

A smart young lady (my daughter) once told me that before you retire from the main thing, you need to have already started the next thing. She said don’t wait till you leave one phase to begin the next phase. Pretty smart right?

A few weeks ago we sold our lake house that we have owned for 13 years. We bought the house when my oldest daughter (now 32) was a freshman in college and our youngest daughter (now 28) was still in high school. There were many many lake trips, dinners, fireside chats, events and even a few hammerhead boys my daughters brought to the lake. All those events formed our memories at that house. All those memories are precious to me as I look at the pictures that captured the moments through the years. When we sold the house and moved all the stuff out, I did one “last look” at the inside of the house where we have all good memories.

So what am I saying here? Don’t wait till the “Last Look” to start on the next venture of your life because it will keep you alive, alert, fresh and full of hope for the future. KT

Where Are We in the Current Market Cycle?

Career

This blog post is for any hotel real estate folks that may read this blog.

 

I am often asked where I believe we are in the current market cycle. If we were in a boxing match, I believe we just heard the bell ring to start the last round. If we were at a baseball game, I believe we are in the bottom of the eighth inning. If we were slalom water skiing, we just cleared the 2nd buoy at 43’ off. Note; only a water skier will understand that last one.

So to answer the question, in my opinion, we are close to the next market cycle change.

Last week, I heard hotel debt being quoted as an interest only loan. It took me back to January 2007. That was the last time I remember anyone seriously pitching an interest only loan as the way to make a deal underwrite. If an interest only loan is the way you make your deal pencil, my suggestion is to put your hands in the air and back away slowly.

Let’s cover a little history. There were 11 recessions from 1948 to 2010. They all varied in length, severity and duration. During that 62-year period and covering 11 recessions, it took on average 10 months for the market to fall to its low point. It took on average 57 months for the market to reach stability. If that is correct, on average it took six times longer for recovery than for the recession.

When 911 happened, I remember we had 10 to 15 hotels under contract and within a couple of weeks we had zero under contract. That cycle was very different from any past downturn. The market had already begun to fall sharply in the 1st quarter of 2001 with RevPAR off double digits in most of the top 10 markets. By summer 2001, things were in steep decline and concern was everywhere. When 911 happened in September, the bottom fell out of all economic measuring data and the decline was instant. The decline was so steep and deep, it actually bottomed out the economy much quicker than expected which allowed for a shorter recover time. In most cycles a slow decline manifests itself in an even slower recovery. During 911, the decline was almost instant and looking back in retrospect, that quick decline allowed the market to bounce back somewhat quicker than expected.

Let’s look at the last economic cycle as an example. The fall began in October 2007 when the CMBS hotel debt market faltered. Make no mistake, the catalyst that started the last hotel real estate recession was the failure of the secondary debt market and that began in October 2007.

During the ALIS conference in January 2008, we began to see the raw data pointing to a down cycle. The opinions at the time were that the cycle would be short, shallow and quick. No one saw it lasting very long and certainly no one thought it would be that deep. By March 2008, slight concern was replaced by real concern. By May, concern was replaced with denial. By July, denial was replaced with anxiety, and then in September, anxiety was replaced with real fear.

In September 2008, the hotel real estate market fell over the ledge and didn’t begin to stabilize until March 2010. It was an 18-month freefall in RevPAR, EBITDA, NOI and real estate value.

So here we sit in the 3rd quarter of 2015 watching LTV’s rise, DCR’s fall, yields constricting, PPR’s escalating, replacement values exceeded, interest only loans and today’s values based on unpredictable IRR rather than actual return. Couple all these factors with the growing risk in the current securitized hotel debt pools along with the plethora of older securitized hotel debt coming to term over the next 12 months, and it should give all of us some pause. So, yes, I am concerned that we are nearing a cycle change.

Asking the right questions

Career, Life

How many times do we find ourselves in situations where we didn’t ask the right questions? I can rattle off at least a dozen situations from investments to personal situations where if I had asked the right questions, it would have kept me from getting into a situation that I didn’t want to be in.

Many times a misunderstanding is not because anyone lied or did something wrong. It is simply that what you assumed is not what the other party assumed. In our business, I have learned to always cover up front how the money will be split after it is closed. In the brokerage world, assuming something on your own generally will cause you a great headache. When we list a hotel for sale we always try to cover the splits upfront because the worst thing you can do in our line of work is wait until the deal is about to close to discuss money.

Personally situations are no different. How many time have we assumed something only to find out the other person assumed something totally different? It is always, always, always far easier to discuss things upfront before something happens, than to try and correct it after the fact. There was this teenager that wanted to go to a party at a friend’s house. He told his parents that the friend’s parents were going to be at the house. What he didn’t tell his parents was that the friend’s parents were going to be at the house after the party, not during. Well you can guess what happened. There were police involved etc and it could have been all averted if the boy’s parents had asked the right questions.

Years ago I was involved in selling a company where I would remain after closing to help run the company. The buyer was completely truthful and honest and was actually a very good guy. We just went through the closing having assumed that the operations and overhead of the company would remain intact for the new owner. Again, notice the word assumed. Well about 3 weeks after we closed, I really found out the buyer’s plans for the company. There was not one single thing the buyer said he would do that he did not do. The problem was I didn’t ask a couple of pretty important questions before we closed. Had I asked those questions, I would not have sold the company.

Such as in our personal life with family and friends. Ask the detailed questions and that way you won’t be surprised with the outcome. KT