If you’re not familiar, Trammel Crow Company was one of the largest developers in the country. In the 1980’s the recession crushed them as the value of their developments fell from $2.2 billion to under $100 million.
In 1989, Gary Shafer, CEO of Trammell Crow Company, asked each executive to reflect on their individual and company mistakes and compile them into a document of ‘lessons learned’.
On May 23, 1989, Gary shared a memo on the lessons learned from the recession in the 1980’s. If you haven’t read through it, do it. It’s fantastic.
Below are a few of my favorite takeaways from the memo:
- Worst case projections from one quarter tend to become best case projections for the next quarter.
- Cash is king.
- Work renewals hard and early.
- Run a lean operation – but do not cut muscle.
- Leasing assumptions should be driven by the market, not the proforma.
- Do not let competitor’s actions influence your decision on whether to do a project or not.
Regardless of market conditions, this is a great read and something I’ll be revisiting periodically going forward.