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Fall 2009 Construction and Real Estate Report: Weathering recession

When financial times get rough, it’s easy to dwell on losses and layoffs.

When financial times get rough, it’s easy to dwell on losses and layoffs.

But some midstate real estate and construction companies found ways to make it through the recession by changing their communication tactics and revamping their business goals, while keeping in mind the bigger picture. Conversations with representatives of some successful companies reveal their ways of overcoming challenges and making use of resources.

EG Stoltzfus Homes
Lancaster County

Free time doesn’t have to translate to losses or bad attitudes.

Brent Stoltzfus, president of East Lampeter Township, Lancaster County-based EG Stoltzfus Homes, said his company has searched out and found opportunities it would have missed had it not been for the recession.

“We’ve had the time over this past year to focus more on green building,” he said. “Green building is a growing and positive thing within the industry.”

EG Stoltzfus Homes became the first company in Pennsylvania to receive a gold-level certification for a green-certified home from the National Association of Homebuilders.

Experience in the construction industry is an asset to making it through tough times, Stoltzfus said. Having been in the business for more than 40 years, the company has learned from past cycles of success in construction. Keeping focused on the future has brought the company success and is the most valuable lesson from the economy, Stoltzfus said.

“The challenge is to stay focused on our goals, future, the long-term vision,” he said. “(A company) needs to have a long-term plan and purpose and then goals outlined underneath that.”

Rock Commercial Real Estate
York County

Making it through tough times is a team effort for York-based Rock Commercial Real Estate, said David L. Bode, managing partner. Rock Commercial Real Estate was established in 2001, so it is a relatively new player in the Central Pennsylvania real estate industry.

“Everyone here is an employee and we all share the same database,” Bode said. “By sharing information, it helps all of us have a higher level of knowledge and higher impact for the customer.”

A difficult time gives rise to issues for associates and subsequent concerns for managers, Bode said. When an associate is struggling with a transaction, the managers worry about the client, the deals and the people internally.

“The worst part of (my job) is handling (each) day-to-day crisis, running the business in today’s economy,” he said. “You are forced to do some things that you don’t necessarily like to do.”

Coldwell Banker Commercial Bennett Williams
Dauphin County

Companies operating multiple locations can cut costs by using staff at the main location to help with activities at others. Susquehanna Township-based Coldwell Banker Commercial has used that strategy at its main office in York.

Finding creative ways of capitalizing on the market is a prime way of making it through hard times. Many of Coldwell Banker Commercial’s associates are focusing on multi-family and commercial properties with responsible tenants, said Richard McGinnis, general manager of the company’s Harrisburg division. Other associates have worked with banks on foreclosed commercial properties, which are more numerous today than in the recent past.

Making gains in a tough economic time requires being more cognizant of communication with clients by giving them realistic expectations, he said.

“(It’s about) doing your job a little better when it comes to getting the properties you have out there, marketing-wise,” McGinnis said. “If (clients) feel they’re being neglected, they’re going to look for another resource.”

A significant challenge right now is figuring the appropriate pricing for a property, McGinnis said.

“It’s been somewhat inflated in times past, especially for land,” he said. “It’s one of the most difficult areas to determine.”

Landis Builders Inc.
Lebanon County

An established reputation is an asset in a hard economic time.

For Landis Builders Inc. in Swatara Township, recent business is repeat business, President Michael Landis said.

“A lot of our recent business has been regular customers and referrals, which have always been strong for us,” he said. “But in this type (of) economy it’s been serving us well.”

The company also has been holding off on equipment purchases that it would have made under better circumstances, Landis said.

A major challenge for local homebuilders in a rough economy is the threat of lower, unsustainable prices put out by competitors looking to make a quick profit, he said. The economy has driven “moonlighters” to aggressively low and unsustainable prices, Landis said.

“It’s extremely competitive out there just because there isn’t that abundance of work,” he said. “The consumer has the option to be very selective (right now). … You have to be at the top of your game.”

Becoming and remaining prepared for any turns in the market are lessons to heed from surviving the economy.

“It makes you take a look at your company in a way that you may not have in a normal economy,” Landis said. “(You) look within yourself and make sure you’re offering the best customer service possible.”

NAI CIR Commercial
Cumberland County

Focus, focus, focus is the theme for NAI CIR Commercial, said Robin Zellers, chief operating officer of the Wormleysburg-based company.

“For over 39 years, we’ve built a reputation for being trustworthy and professional,” he said. “We are focusing on creatively and aggressively representing our clients.”

Finding a balance between focusing on the needs of the clients with an incentive to think creatively is a challenge for NAI CIR as the dynamics of financial transactions are changing constantly, Zellers said. Being a member of the NAI Global Network has provided the Camp Hill-based office the chance to contribute to the creative ideas of the global company, including participating in the NAI power sale, an online auction opportunity for buyers and sellers.

Cutting costs isn’t the only way to conserve resources in a recession. Re-allocating money to activities or research that support the foundation of the company is a way to further potential for future profits, he said.

“What we’ve focused on is allocating operational resources to researching the market and communicating information accurately to clients,” Zellers said.

Though the Central Pennsylvania market has recently changed, there is not a tremendous burden of distressed assets in the region, Zellers said.

“Remember that our economy is a cyclical economy,” he said. “So while there are dips, there are also periods of tremendous growth.”

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