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Times of turmoil catalyst for creation of Commercial Real Estate Workshop
Jane Konecny
Reprinted with permission from the April 16, 2002 issue of the Midlands Business Journal
The late 1980s were a time of turmoil for those in the commercial real estate market, and it was during those times that the idea for what is now the Commercial Real Estate Workshop was born.
Jerry Slusky, shareholder in Gross & Welch and founder of the event, had been teaching real estate law and development courses at Creighton University Law School. He said the Resolution Trust Corp. was the catalyst in the formation of the event, now in its 13th year.
“In the late 1980s, the commercial real estate world fell apart,” Slusky said. “It was a time of huge overbuilding and oversupply for commercial real estate, and it had caught up with us.” The Resolution Trust Corp. was formed by the federal government as a way to bail the sector out of hundreds of billions of dollars in bad real estate, Slusky said.
“I said to the dean, ‘The industry we are teaching is in turmoil,’” he said.
Those in the industry did not understand issues surrounding the Resolution Trust Corp., he said, and he was asked to conduct a seminar for those in the commercial real estate industry.
“In May 1990, the Law School sponsored a course on understanding the Resolution Trust Corp.,” Slusky said. “We invited anyone who made a living in the commercial real estate world — brokers, developers, appraisers, title insurers, accountants and lenders, whom it affected dramatically. As a consequence, 375 people attended. We sold out the main auditorium.
“The event was very well received, and the feedback was that they really enjoyed the content but also the fact that it facilitated a get-together with others in the industry, and we were asked to do it again.” Nebraska Continuing Legal Education sponsored the seminar for five years, moving the event to hotels such as the former Red Lion in downtown Omaha. The workshop now is sponsored not by any one entity but by the commercial real estate community, Slusky said.
Times have changed for the industry, and the focus of the event has continued to change.
“During the time of the RTC in ’90, ’91 and ’92, we saw titles like ‘Do we see daylight at the end of the tunnel?’” Slusky said. “From then on, the industry was like a rocket ship. We had not built in five years, so there was a huge pent-up demand, and a building boom started in 1993.”
In the midst of those times, Slusky said, the question was more like ‘How long can the boom last?’
“Last year it was, ‘Do we hit the brakes or step on the gas?’” he said. “The consensus was to view the industry as a yellow light and to exercise caution, and that philosophy has paid off. Last year, there was only a minor downturn, with more office, commercial and retail vacancies.”
While the market may be experiencing a slowdown or a boom during a given year, that has not affected the popularity of the workshop, Slusky said.
“Through all 13 years, when we send out the invitations, we fill up within two or three weeks and end up having to turn people away,” he said. “People of all professions come in droves, because it is the one meeting during the year that has its finger on the pulse of the regional commercial real estate economy.”
Looking back to the workshop held in 1992, Slusky said the leap the industry made between then and of 2000 is a clear example of how quickly the market can turn around.
“In 1992 we had a panel of commercial real estate brokers who got up one by one and told their tales of woe,” Slusky said. “All areas of commercial real estate — retail, offices, industrial, apartments, land — were in a deep recession. Whether long term or short term, there was no mortgage money available. The money was there, but it had been pulled out of the market because of the concern with oversupply of product. It was the depth of the recession.
“Contrast that with 2000, and ‘How long will it last’? It was an unprecedented boom. We basically went from top to bottom in eight years.”
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