Recession Era Management


How TMR Properties Survived the 2008 Real Estate

Markets Collapse and the Subsequent Recession


In the years preceding the 2008 market collapse, seven TMR partnership properties reached maturity and were profitably resold. However, at the end of 2008, we were still operating four, early-stage TMR partnership properties located in the state of Texas. Over the next several years, these four properties were embroiled in an unprecedented fight for their very survival, during the deepest economic recession in recent memory.

By late 2008, multifamily economic occupancy across Texas had deteriorated from 93%, to 75% and lower. In short order, hundreds of billions of dollars in real estate value were wiped out as cap rates rose from a pre-recession average of about 6.0% to more than 10.0%. To make matters worse, three of the four Texas properties had first mortgages that would come due in 2009 and 2010.

TMR’s successful battle for the survival of the four Texas properties involves drastic cost cutting, extremely difficult asset and property management decisions and creative marketing initiatives. Additionally, their survival depended on the outcome of an epic, multi-year fight against Federal bank regulators and certain banks attempting to force us to sell and payoff the mortgages years before their actual due dates…despite the fact that not one mortgage payment was ever paid late!  

Instead of giving in to their heavy-handed legal pressure, we dug in our heals and fought back, ultimately holding off the banks, stabilizing the properties and successfully refinancing every one of the mortgages when they were due. In the end, none of the partnerships lost equity capital and all four properties were cash flowing again by 2012. From the beginning, we firmly believed in the four properties’ ability to recover fully given a reasonable amount of time…it was rewarding to be vindicated! 

A lot of the credit for the properties’ survival goes to our loyal investors who supported us all the way. Additionally, I can’t say enough about our terrific on-site staff, those hard-working Texans who, without complaint, accepted the difficult operational standards I initiated together with ultra-tight budgets in 2009 through 2012 to stay afloat. As they say in Texas…”I take my hat off to y’all”. 

Bruce G. Thayer
October 1, 2016

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