Professional Report - 2nd Quarter 2011

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lenged every single expense we had.” He says many opportunities for savings were uncovered in this manner. “Some were obvious, and some were not; so some were big and some were small; but in aggregate we were able to cut 20-25 percent from the year before -- and that surprised us,” he shares.

Kevin C. Geenty, SIOR, vice-president of The
Geenty Group in Branford, CT, says his cuts were
also achieved “through an in-depth analysis of all
line items in the budget. When you do that type of
evaluation, you are able to identify line items that
readily appear to be too large, or items which are not
providing value in return for the dollars spent.”
In terms of specific cuts, he continues, the ulti-
mate decision is based on “best guess and trial and
error. If we cut too much from an expense, it will
become evident in a few months, and we will refund
that item to some degree.”
“As a really broad statement, one thing I’ve found
myself continually learning over the last several years
is how many different ways and different line items
you can look at and break the mold on what you think
you have to do,” says Gabriel Silverstein, SIOR,
president of Angelic Real Estate, LLC, in New York
City. “For us it’s been very helpful to figure out how
to throw out the old playbook and re-think what you
really need. So, for example, do you have to print
‘X’-hundred copies of things to send out to people
when marketing a building for sale -- does it really
help you, or do they end up in the waste basket any-
way?”

John Barker Jr., SIOR

By Steve Lewis

Kevin C. Geenty, SIOR

Geoffrey Kasselman, SIOR, LEED AP

If the recent economic downturn has taught real estate professionals one lasting lesson, it’s that ‘doing more with less’ is more than just a cliché. In perfecting ‘The art of the cut,’ SIORS say they have found new ways to curtail expenses without sacrificing the level of performance they provide their clients.

The key, they agree, is to
examine all areas of their
budgets. “We look at
every business unit and
review both income and
expense,” says David J.
Zimmer, SIOR, FRICS,
of Zimmer Real Estate
Services L.C. | ONCOR
International, in Kansas City, MO.
“We ask the manager for his business
plan and how he plans to make his unit profit-
able. There is a certain amount of corporate expenses
that are allocated to each division under a preset for-
mula. We will not accept (with few exceptions) a
budget that projects a loss. So if that is the case, we
look at the top line to see if it is realistic and if so,
we then look at expenses to see what has to be cut
to get to a balanced budget.”
“We took a systematic approach,” adds
Geoffrey Kasselman, SIOR, LEED AP,

with Op2mize, LLC, in Des Plaines, IL. “We addressed everything; that doesn’t mean we cut everything, but we chal-

Nicholas J. Malagisi, SIOR

Walk the Walk Kasselman says that one of the biggest “surprises” he experienced during this process falls under the category of practicing what you preach – which, he notes, is helping clients understand how to make informed decisions on the total cost of occupancy -- not just rent. “We’re all pretty good at that -- especially SIORs -- in guiding clients through that process, but we do not necessarily always use that for ourselves,” he says. “In our case, we approached our landlord about rent reductions, as we might have done for a customer. We were very pleased to find they were open-minded, and we saved money on rent and got 1. 5 months’ free rent; all in all that worked out to thousands of dollars to us. All we had to do was ask.”