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Published on: 1/1/2005
Last Visited: 8/29/2008
In another portion of the leadership roundtable program, Denny Alberts, president and chief operating officer of Crescent Real Estate Equities in Fort Worth, Texas, shared a story of how those companies managed to turn around from the brink of collapse to become a thriving success.
Founded in 1994, the real estate investment trust started out purchasing premier real estate at discount to replacement-cost prices.However, the company's strategy changed dramatically in the late 1990s, when a senior management shift resulted in the company investing in casinos and skating rinks.A series of "bad decisions," along with little intervention by the company's board of directors and a lack of long-term vision, almost caused the company's ruin, Alberts said.However, a management reorganization and strategic turnaround began in 2000, with the company focusing on investments in upscale office properties, resort development and "lifestyle" communities that cater to active baby boomers.
"We needed to act quickly and make changes at the top, not the bottom," Alberts said.Throughout the restructuring process, the company found it critical to "communicate often" to retain valued employees, who had stuck with the company but were unsure that it would indeed move in a positive direction, he said.
In addition to altering its investment strategy, the company made other operational changes, including modernizing its business model to allow for more shared ownership, to reduce its debt and increase its liquidity.In addition, the company expanded the technology of client tracking used by its law firm, and developed software to predict retail sales based on income and demographics, which can be used to select tenants for shopping centers."The investors love it," Alberts noted.