MANAGING THE UNMANAGEABLE
In business as in life, there are the things we can control and things we can’t.
Things like the economy, and its distant relative, the legislative decision-mak-ing that could directly or indirectly impact the economy.
It should come as no surprise that both Nick Schwendeman and Ingo Kraus
take philosophic views of those things beyond the reach of their control. But
philosophic doesn’t mean they don’t care.
“I’VE NEVER SEEN SUCH UNREST IN THE POLITICAL FORUM,”
SAID KRAUS. “THE FINGER-POINTING AND NAME CALLING
ARE EMBARRASSING, AND THEY’RE A DRAWBACK TO ANY-
THING GETTING DONE IN WASHINGTON. But politics doesn’t occupy
a great portion of my mind. It’s important to go and vote, but I don’t spin my
wheels too much about it.”
Schwendeman confirmed he is involved with the political activities of IREM
and NAR. “We try to stay as in tune as we can, and we recognize that some-
times the wheels of D.C. turn very slowly, and we can only hope the decisions
they render will protect our industry.”
In terms of the economy, despite the extended run of the upcycle (which
itself would imply a coming downturn), Schwendeman remains confident: “It
seems the fundamentals are sound. Businesses are no longer betting on the
outcome like they were in the dot-com era and other times of turmoil.” And
certainly that’s true as of this writing; The stock market is on fire.
“People talk doom and gloom about the change of leadership and predict that
the market’s going to tumble,” he said. “But it’s been on a pretty steady climb.
And while I think it’ll keep going, no one really knows for how long.”
As an AMO, Altman is somewhat protected from economic upheaval by the
nature of its product. “Multifamily always seems to be the go-to investment,”
Kraus said. But it’s more than that. “THE COMPANY IS VERY SMART,
AND DURING TIMES OF SLOWDOWN OR RECESSION, IT FO-
CUSES NOT ON RAISING RENTS BUT RATHER ON MAINTAIN-
ING HIGH OCCUPANCY AND WEATHERING THE STORM.
“Economic downturns create opportunities for companies like Altman,” he
noted, “which has cash on hand or access to capital to buy properties at a dis-
count. So I don’t necessarily look at downturns as a bad thing. As we’ve said,
it’s a matter of being smart and positioning yourself.”
JOHN SALUSTRI IS A CONTRIBUTING WRITER FOR JPM®. IF YOU HAVE QUESTIONS REGARDING THIS ARTICLE OR YOU ARE AN IREM
MEMBER INTERESTED IN WRITING FOR JPM®, PLEASE E-MAIL MARIANA TOSCAS AT MTOSCAS@IREM.ORG.
and due diligence. Knowing what your
competitor is doing, and why, is criti-
cal. Remember, information is king.”
Third on the list for Kraus is “quality
control and consistency of service,” and
those three things all add up to “ongo-
“So, even though in the minds of
owners that’s probably No. 1, I would
say it’s No. 4 because it’s the inherent
result of the first three items.”
There’s an old joke about ask-
ing economists about their outlooks:
They’ll give you a direction or a time-
frame, but they’ll never give you both.
But when the global outlook is distilled
CREATE OPPORTUNITIES. IT’S
A MATTER OF BEING SMART
AND POSITIONING YOURSELF.
down to the local level, it’s the people in
the trenches, the Schwendemans and
the Krauses of the industry, who have
to battle business, political and economic changes toe-to-toe. Their only
armaments are knowledge, preparation and the awareness of what business
they’re in. And maybe that’s enough to
SAVVY isn’t there like it used
to be years ago. Other cultures
do a much better job.”
—INGO KRAUS, CPM, ALTMAN
MANAGEMENT CO., INC., AMO