No team is hot all the time. Here’s how to help your team get through the hump
There is so much buzz around about how to navigate a difficult market. This April, Inman will help you get rid of the clutter and make smarter business decisions in real time. All month long, we’re going back to basics and learning how real estate professionals evolve their systems and invest personally and professionally to drive growth.
In every organization, employees will encounter a wall at some point. The app has bugs, the customer is unhappy, or the prospect has disappeared. All businesses face these challenges. However, in my business, the wall is more often associated with the team.
At the end of 2022, the Federal Reserve raised interest rates to the highest level in 15 years, increasing our spending and briefly reducing demand for rentals in the multifamily real estate industry. Of course, this strained the members of our team.
And they had questions:
How concerned are you? Will we find a property to purchase? Can we close a deal this quarter? Is the end of the world coming?
It became a serious obstacle for our team. Instead of negotiating acquisitions or closing new deals, some employees momentarily froze in the face of uncertainty. Since no one wanted real estate, I immediately tried to ease their stress by explaining how our firm had approached destruction for decades.
Because we are flexible, well capitalized and connected, we have the ability to turn challenges into opportunities. So let’s do it, I told them. Yes, the Federal Reserve took us by surprise and paralyzed the markets in a way we didn’t foresee. But we’ve rebooted and tuned in, and now it’s time to take on this challenge. No wonder our team did it.
The tools you need to support your team during difficult times
Every team stalls or gets stuck as tasks, lifts, and deadlines approach. Successful leaders can nurture employees during difficult times using a variety of strategies. Communication, honesty, transparency, and understanding are tools that drive positive change year-round, but become even more important during times of downturn. Leaders should use them to assess problems, understand conflicts, and come up with solutions.
In addition, the consultants recommend that managers conduct frequent reviews, encourage feedback, and work collaboratively to minimize the impact of these impediments. Team-building exercises and group breaks (such as bowling) can unravel the knots and restore team clarity. Personally, I find history to be an exceptional motivator. I share it with my team as often as possible and necessary.
Here is my presentation, combining experience, history and a little pep talk. The multi-family housing sector goes through cycles but has proven remarkably resilient. Apartment occupancy and rents rose monthly for nearly two years before stagnation late last year, according to The Wall Street Journal.
As the pandemic has shown, people can work, shop and communicate remotely. But they can’t fall asleep at night or open the refrigerator on the Internet in the morning.
Prior to that, during the 2007-2008 subprime mortgage crisis, I saw some investors shy away from numerous asset classes, including apartment complexes. Some sold property to minimize their insecurity, which created opportunities to buy entrepreneurial firms like ours.
Our firm made some of its best deals at a time when large institutional buyers were watching from the sidelines. We bought valuable real estate at a good price, operated it successfully and appreciated significantly when conditions returned to normal.
Create a compelling message to help your team
Our hump overcame external forces that made others nervous. Our response illustrates the values that have guided us for five decades: be calm and patient, because everyone needs a place to live.
This message sometimes needs to be repeated because these days we are bombarded with bad news. I answer by telling our story. We develop and acquire apartment buildings in places where people need quality housing at affordable prices.
We develop innovative concepts in desired locations. We know that certain sites will work. We studied regional demographics, existing property occupancy rates, and population growth. We know we can provide value that is not currently available because it is our business. Our metrics over time demonstrate the ability to overcome any hump in front of us.
In any business, even in real estate, a stalled team is not necessarily negative. Facing humps benefits employees. This requires them to think strategically, find creative solutions, and get back to working together.
Friction raises awareness, arouses curiosity, and keeps employees alert. This encourages them to try new things and get out of their comfort zone. Coaches of all stripes call it “being comfortable being uncomfortable.” Good teams already exist.
Ultimately, the best way to get teams to overcome adversity is to build good teams. They should be filled with dedicated and motivated employees who are eager to do good work.
The right people are rare. Leaders who find them must nurture them by providing jobs that reward people financially and professionally. Valuable people bring support to the workplace. They understand that the rut is inevitable and temporary, and that their best work is in the long run.
In my experience, leaders who stay calm, keep their point of view, and are good coaches are the best at helping their teams overcome adversity. And if all that fails, set up a bar: I remember visiting McDonald’s global headquarters, which had an outdoor terrace where bartenders poured beer for employees after hours. “Can they do it?” I asked. Someone replied, “Oh, of course, it’s a new day.”
I guess you never know when or how inspiration might come.
Michael H. Zaransky is the founder and managing director of MZ Capital Partners in Northbrook, Illinois. The company was founded in 2005 and is engaged in the sale of apartment buildings.