The Great Recession might be years in the past, but commercial real estate executives haven’t forgotten the lessons learned from that time. Rick DeKam, principal with Midwest Realty Group, a Portage-based full-service real estate firm, has spent the last several years building up the company’s cash reserves to prepare for an eventual downturn. But beyond external factors such as “national and global issues related to the country’s presidency and the fact that our county continues to become more and more divided,” he believes the overall business climate continues to look positive.
“Contrary to most developers’ current positions, we continue to focus on retiring all short-term company debt and on building our cash reserves. The winners from the last recession were those with cash. If more investors take a similar position, it would have a dramatic stabilizing effect in any future economic declines. … I believe that 2017 surprised most industry professionals as it started strong, but only built momentum from there throughout the entire year. Most industry professionals finished the year with record-breaking volume and a considerable backlog going into 2018, with no slowdown in sight. As such, most of us continue to expect the same to continue throughout 2018. But for most of us (who) successfully weathered the recent Great Recession, (we maintain a healthy) respect to not becoming over-committed or over-leveraged. … We balance all new company growth and prospective new investment/development decisions against a set of new ‘worst case’ financial scenario projections, considering the lessons learned through the last recession. We’ve therefore become more conservative in our financial projections.”