Over the years, as both California and Golf Realty Fund (GRF) have grown and matured, individuals and major corporations have entered our field of real estate investment and development.
Some have succeeded spectacularly, but the vast majority have failed outright. Some failed in good markets, some survived in a good market and failed in a tough market, some succeeded spectacularly in a good market and failed spectacularly in a tough market. The real estate industry is highly cyclical.
A strong real estate market is euphoric and very seductive. Amateurs with poor instincts and judgement are “bailed out” by inflation and the strength of the market. Seemingly intelligent people become convinced prices always go up. As the market gets hotter, credit becomes easier and with it, the ability to become highly leveraged and overextended. The hot market psychology creates a frenzy of greed where the evaluation of risk is difficult or even overlooked.
Eventually, the necessary downturn comes. The system begins the painful but important cleansing process as the economic pendulum moves the other way. As the downturn picks up momentum, those who are overextended, have a poor product, are poorly positioned, lack imagination, are inflexible, lack courage, have poor judgement, fail to understand the importance of the customer, have poor personnel, lack inspirational leadership or are simply unlucky are added to the casualty list.
On the other hand, there are many examples of real estate owners that became complacent, developed analysis paralysis, failed to reinvest in reinvigorating their properties, and failed to grow. For those, their decline and eventual death came slowly but just as surely.
We believe strongly in a portfolio of excellent real estate as the best long term investment.
These are the core beliefs and values which are extremely important to our survival and success. By understanding and focusing on these beliefs and values, each member of the Team will have a philosophical reference point to guide them in the execution of their responsibilities and duties.