The View From Your Recession

by Chris Bodenner

A reader writes:

My partner and I started our own architecture firm in Miami about five years ago, after many years of working at other large local firms. During the last ten years we were involved in designing many of the condominium high rise projects that fueled the latest construction “boom”. For a couple of years, until 2007 – Miami resembled Hong Kong or Shanghai- the pace of new construction was insane. Our firm ended up growing to sixteen people at the height of the craziness- we had four towers at one time, over two million units in one year. We were published in many of the local magazines and newspapers. We won numerous design awards, and life was very good. It was not just us- everyone seemed to be doing really well.

Needless to day, those days are over and we are living through what is the worse slow down in our industry that anyone can remember. Even the “old timers” are shocked at how bad it has gotten.

Our newer projects have almost all stopped or been put on “indefinite” hold. What we hear from the developers and other clients is that money is frozen, banks are not financing. This may actually be a good thing for the City of Miami and other places, as a lot of bad buildings got built too quickly and in some cases, very poorly. But it is killing our profession and anyone connected to real estate or development.

Every couple of months we had to reluctantly let go of our employees. We were down to two last month, now it looks like even those will need to go as we have run out of work. The rest of the firms are doing just as badly. One of the larger firms are down from 150 to 20 people, most of the smaller ones are down to the principals and one or two others. Very little administrative people are left, everyone is trying to cut, cut, cut and survive. Most firms are closed Fridays or reduced their hours by 20%. Many, many offices stand empty. No one is paying health benefits, or 401 K plans. We can’t even afford our taxes and will have to as for a payment plan.

We are hanging on by a thread. We moved our office from the downtown office. We cut our space by over half. We try to go on and stay positive but it has been a grueling two years. We owe money to just about everyone, and have gotten into quite a bit of debt as every month we bill less and less and get paid late, if ever. It is not like we can go and quit to get another job. There are no other jobs to be had. We haven’t been this broke since college. It is really, really scary. And we hear the same thing, almost every day, from every single one of our architect friends.

We have in recent months (before August- which is always dead) started to see a few, tenuous “green shoots”- luxury single residential projects seem to be doing OK. That is about it. The very, very rich that do not need financing are doing just fine. We hear stories from these clients of the amazing deals that they are making. One bought a 93 foot yacht at a fraction of the price from some unlucky soul who needed cash fast. Another got a brand new BMW for $40,000 less than list because the dealer was desperate.

We are holding on and do our best to survive and we pray to God that this recession ends soon.