Collaborating with the Legal Team Ensures Communications Success During Crisis

By Garet Hayes

Published in PRNews’ Crisis Training Guidebook

Often a moment of panic sets in when a company is faced with a crisis, whether employees have been maimed or killed on the job, or a natural disaster disrupts business operations.  Once the moment of disorientation passes, the executive team realizes the need to engage the Crisis Communication Plan prepared at an earlier date. 

By a combination of instinct and experience, executives know to pull the company leaders together and assess the situation.  Many first steps in the Crisis Communication Plan recommend that company leaders sit down together to quickly triage the situation and then communicate updates to appropriate audiences.  On the periphery of the action, executives know the legal team must give the stamp of approval to a public statement and the communications efforts.  Unfortunately, seeking legal counsel and input is often a last step. 

Use the following guidelines to create a collaborative environment that effectively communicates time-sensitive information to audiences.  Executives and the communications team know that accurate information communicated quickly during a crisis builds trust and helps ensure that the company’s long-term reputation is not damaged.

1. A solid crisis communication plan will engage the legal team from the beginning to create an atmosphere of collaboration and mutual understanding.  When the executive team calls the Crisis Team together, legal counsel should be sitting at the table, too. 
2. The Crisis Team should discuss the key messages they need to communicate.  With legal counsel present at the table, members of the team will hear each of the reasons behind why a message is critical and will understand why a particular word and its connotation was chosen to convey a specific meaning. 
3. If necessary, the Crisis Team can prioritize which messages to communicate first and which can be given publicly at a later time.  Usually, the legal counsel may have concerns about communicating detailed messages.  These are often complicated messages to communicate at the beginning of the crisis.  For example, a company experiencing an explosion in a manufacturing plant may be asked what caused the incident.  While executives may have a strong understanding about what caused the accident, the legal team may advise against discussing these details, knowing that information provided could affect future law suits.  Initial messages communicated in the crisis can be about the safety of the employees and what the company is doing to get the plant operational again.
4. During the discussion, one communications person at the table can be assigned to prioritize and refine key messages.  As the Crisis Team discusses each point, this communications person is responsible for capturing the context of the message and providing counsel from a news media standpoint.  The communications person can print and distribute each draft of messages to the team and then include feedback into the next version. 
5. This collaborative process will probably require an hour or two in the “War Room” as the Crisis Team works through key messages.  However, those two hours with the best counselors working together will ensure that all parties are confident of the statement that will be delivered to the public.
6. A single spokesperson should be designated to deliver the initial statement and respond to all media inquiries. While this executive may already be media trained and accustomed to handling reporter questions, a member of the legal counsel should accompany him or her during interviews that involve crisis situations. The attorney will not only be available to answer legal questions, but can also help prevent the discussion of details or other information that could affect future suits.

There’s a fine balance between keeping the media and public informed while not implicating one’s company during the situation.  When all members of the leadership team and legal counsel discuss together the best approach for providing updates publicly, this ensures that valuable time isn’t wasted with separate discussions that only provide bits and pieces of the full context.

Pick Two…

By Dave Van Voorhis

My name is Dave Van Voorhis.

A few things you probably don’t know about me.

I work at Hope-Beckham, which I believe is the best PR firm in Atlanta.

I live in Flowery Branch, Georgia, near Lake Lanier; my commute is 42 miles each way.

I drive a 1999 Jeep Wrangler with almost 240,000 miles; I had always wanted a Jeep.

(Wait…can that be true, 240,000 miles?)

I have a great mechanic, Mr. Dalton of Dalton Automotive, in Marietta, 50 miles each way from Flowery Branch, and I wouldn’t go anywhere else… ever. (240,000 miles and counting)

In Mr. Dalton’s waiting room is a sign… Good, Fast and Cheap – Pick Two!

If you think about it, that phrase can be used for a lot of things that we encounter in our daily lives.  For me, it comes into play when trying to establish goals for a PR plan and managing the expectations of the client.  From a complex, long-term plan to a short-term single pitch or event, there are many things to consider.

- What is the current situation? What is the client’s goal in utilizing PR?

-  What is the timeframe necessary for the client?

- Does a budget exist for the program? How much has been allocated or will be necessary to fund the endeavor?

Begin with the end in mind… whether looking to a firm like Hope-Beckham for PR, deciding on what to order for dinner or making travel plans… know this… good, fast and cheap… you can only pick two.

At Hope-Beckham we strive to make it possible to have all three.  While we don’t consider ourselves cheap – that would belittle our ability — I do believe that if you are looking for PR support locally, regionally or nationally, Hope-Beckham is a great choice.

To learn more about Hope-Beckham or how in the world I have a Jeep Wrangler with 240,000 miles, give me a call at 404-604-2613 or email me at dvanvoorhis@hopebeckham.com

Reaching Email Nirvana

By Ann Nelson

I admit it.  I have a love/hate relationship with email.

I love the fact that I can make requests, provide information or get feedback in a way that doesn’t require interruptions on either end and can be handled on my schedule … like while waiting on hold for customer service!

I hate the fact that emails can overwhelm my inbox with offers of cheap medications, spa deals, guaranteed loans and opportunities to help Ethiopian royalty get money out of the country! And those are just the emails from people I don’t know. Being inundated with incredibly cute pictures of kittens, overly sentimental or religious messages and political rants from my friends and family are similarly annoying … even when my failure to forward them will result in my never winning the lottery and having unbelievably bad luck for the rest of my life.

But how can I balance this email conundrum and reach email Nirvana?  I have established a few rules for my business email communication. They help me; perhaps you can apply them as well.

1. Keep it Short
   Email is not the place for that epic piece you’ve been planning or a lengthy essay on credit default swaps. A concise, clearly crafted message can be quickly read and acted upon, even on a phone screen. Bullets are often a great way to convey multiple points and larger bits of information in an easy-to-read format.
2. Don’t use acronyms
   You may be familiar with RUUP4IT (Are you up for it?) but your recipient may not have a clue what you mean. Leave the acronyms, juvenile jargon and incomplete sentences to the teens. Remember, in an email, words are all you have to get your point across. Which leads to …
3. Don’t use emoticons
   They are unprofessional.
4. Respond promptly
   My rule is to respond within 24 hours or let the sender know when I will be able to respond. The reality is that I usually respond to business emails right away, but in the event that some responses may take longer, I notify the sender.
5. Don’t use Reply All without serious consideration
   When you receive a group email, respond to the sender only, unless it affects everyone involved. Most people don’t like their mailboxes jammed with multiple responses.
6. Don’t send an email when you are mad
   Once you hit the Send button, you can’t take it back. For any sensitive email, I leave off the recipient, craft the email then save it as a draft. Without a recipient, it can’t be sent accidentally. Going back to message after a cooling-off period allows me to calmly evaluate whether or not to send it.

Hopefully, we can all use email as the productivity tool it is meant to be by crafting messages and communicating efficiently with both grace and style.

THE FIVE NECESSITIES FOR A SUCCESSFUL EVENT

By Laura McNally

In my six years as an event coordinator at Hope-Beckham, I have definitely learned a few tricks of the trade.  Since “Murphy’s Law” lurks beneath the surface of every event, I need to be prepared.  And this is how I do it:

 1.  A REALLY big Rolodex.  This Rolodex will be filled with the names and phone numbers of people you can call at a moment’s notice to staff your event.  It will also include business cards for professional sound and lighting companies, sign companies, screenprinters, premium item companies, photographers, balloon companies, barricade rentals, golf carts…this list could go on forever.  You will obviously have your “go to” vendors, but you need backups… and lots of them.

“If they are ‘professional’ they will have a business card to put in a Rolodex”- Event Planning For Dummies.

 2.  A good relationship with every tent company in town.   And no matter how much faith you have in the company, always inspect the merchandise ahead of time, if possible.  You don’t want to get to a press conference to set up only to find out your client’s $900 banner cannot be hung because the $20 piping you ordered is bent.  And you want the cleanest, newest tent in the warehouse. 
If this tent’s-a-rockin, it’s BROKEN.

 3.  The “essentials” bag.  Take this bag to every event.  It includes duct tape, scissors, Windex with paper towels, extension cords, a camera, a tape measure, panchos, your charged cell phone with charger and zip ties.  I have yet to run an event where I didn’t need at least one zip tie. 
Zip ties are to events as salt is to the ocean.

 4.  The binder.  THE binder.  It will not leave your side during the event.  It contains maps, the run of show, parking passes, permits, vendor badges, contact information for all your staff, vendors including backups, on-site coordinators, clients and anybody else who will be onsite.  Get their office numbers, cell numbers, email addresses, home numbers and their parents’ home numbers. Just kidding about that last part, but you get the idea.

 5.  A big van.  I am lucky enough to have the keys to a Ford Econoline owned by Hope-Beckham.  It is not the most beautiful or fastest van in the world, but it is dependable, has tons of room in the back and fits into a parking deck.  What more could an event planner want!  The van saves our clients tons of money, as I do not have to rent a vehicle every time I go to setup.  Always pack the van the day before to make sure everything fits.  And have parking arranged ahead of time, trying to get as close to the event footprint as possible for load in/out.  Remember to always be a very careful driver.  In my career, I have only had one incident where I grazed a pylon in the Cynergy parking deck at Georgia Tech.  No harm done.  The deck actually ended up collapsing a few months later anyway.  Wait a minute…

To summarize, organization, over-preparedness and confidence are the keys.  Nike trademarked the phrase “Just Do It” before I could get to my lawyers, but that is my motto when doing events.  Get the job done no matter the obstacles, rain or shine, and do whatever it takes to make it fantastic. 
And don’t forget the zip ties.

Beyond Memorization:

A Guide to Coaching Executives for the Media

By Garet Hayes

Senior Vice President of Public Relations, Hope-Beckham Inc.

Published in PRNews’ Media Training Guidebook; Volume 4 © 2011

Executives preparing for media interviews often believe that memorizing a set of key messages is all that’s needed to have a productive conversation.  However, an interview’s success is determined by its style and delivery, in addition to the content. 

In order for executives to become more comfortable with the process of sitting down with a reporter, prepare them with actual mock interviews that allow them to see themselves as the interviewer sees them.  This is achieved by conducting a two hour-taped media training session.  Through taping, even if preparing for a print interview, the executive can truly see what the audience sees and will become conscious of the verbal and non-verbal cues he or she is giving the reporter.

Additionally, the executive should deliver the messages in a truly authentic way.  By practicing media interviews ahead of time and allowing the executive to hear potential questions, he or she can formulate answers that are authentic.  It will also indicate whether a level of excitement and enthusiasm about the company’s service or product is being communicated. 

If time is taken to prepare, when the time comes to sit down with a reporter it will show.  Rather than trying to recap the memorized talking points, the story will be told in a meaningful way.  Use the following points as a guide for meeting with an executive to prepare for media interviews. 

Set aside two hours.  Even though executives have high demands placed on their schedule, secure a minimum of an hour and a half of uninterrupted meeting time to focus on media training, techniques and to conduct mock interviews.  Don’t try to media train more than one executive at a time unless the interview will be conducted with two executives; for example, the chief executive officer and the chief financial officer might be interviewed together.

Set an agenda.   Make an agenda for the training session to keep the discussion on track, and put it in front of them.  Media training is not the time to finalize key messages; these should be hammered out and agreed upon by decision makers prior to media training.

Develop a high-level message visual that is easy for the executive to remember.  Consider using a baseball diamond visual (or another sports analogy) to teach the executive to remember three main points.  Associate each of them with a base in the baseball diamond.  The executive should touch all three bases at some point in the interview.  End the interview with the home plate or wrap-up message.

Discuss potential questions and answers with the executive.  The Q&A should even include questions that are highly unlikely, since he or she will need to prepare for them in case they are asked.  For instance, consider a question about a competitor or an industry practice that, though not being practiced at the executive’s company, is receiving negative attention.

Review confirmed media appointments and expectations for each meeting.  Discuss the reporter’s background, personality and familiarity with the company.  For example, are they a long-time industry reporter or recently assigned to cover the company?

Practice the 30-second sound bite exercise to prepare the executive for broadcast interviews:  Ask a question, then use a stopwatch to time the answer.  At 30 seconds, say “STOP” wherever they are in their answer.  Do this exercise several times so the executives can get a feel for how long an appropriate 30-second sound bites lasts.

Conduct a mock interview with a set time limit with the executive.  If you are preparing the executive for a print interview, treat it as the actual interview.  Don’t critique or offer any suggestions during the mock interview — wait until afterwards to critique it.

Videotape the mock interview, even if it is a mock interview for print.  The executive can review the tape and will then see if they have any noticeable quirks they need to concentrate on changing.

Briefly review the videotape.  Point out nonverbal cues the executive is sending.  It is often more impactful not to provide tips on nonverbal cues before this taped exercise.  When the executive sees for the first time how he or she appears to the journalist, the impact will be greater without having been previously coached.  Some executives might not realize that by not sitting forward in the chair or making eye contact, they appear disinterested or distracted. 

For the media training finale, bring in a former journalist (or freelance journalist) to actually conduct another mock interview.  This person should be someone who isn’t familiar with the messaging and can ask questions without having been exposed to the key messages.  After the interview, the freelance journalist will then write a brief article based on what messages they heard during the interview and what angle they found to be most newsworthy.  This exercise is very eye-opening to some executives, as they learn about what qualifies as newsworthy content from a journalist’s point of view.

After the interview, provide the executive with a one- or two-page summary of customized feedback.  Sample feedback includes:

1.   Engage the reporter when you first meet him/her.  We’ll have some personal facts about the reporter but always feel free to ask, “How long have you been at this business?  Where were you before?”

2.   Be proactive in the interview.  Take the lead and tell your story.  While you need to be sensitive to letting the reporter ask a question, you should take the initiative, move the reporter through hearing the “bases,” and tell the story in a fluid and engaging way.  Do not wait for the reporter to bring up a topic, because it may not happen.

3.   Show a high level of energy and enthusiasm for this subject.  Your excitement for your company’s story will engage the reporter.

Common Reporter Techniques – and How to Navigate Them

• Repeating the question.  One common technique is for the reporter to ask the same question three or four times throughout the interview or to alter the question slightly.  The executive should respond with the appropriate answer and could mention, “As we’ve discussed earlier…” Or, follow up with a question, such as, “Do you need more details regarding this subject?” 

• Hardball questions.  While many media interviews take place on friendly terms and are conducted as “informational interviews,” which allow the reporter to get to know an executive, some interviews may include a hardball or unexpected question.  Even if the question is based on a totally inaccurate statement, do not respond with a negative emotion.  Bridge to another key message by redirecting the conversation.  One response technique is to say, “What’s important to note here is that…” and steer the reporter to an accurate statement.

• Stating incorrect information.  Sometimes a reporter might state incorrect information and ask the executive to respond.  The executive should not repeat the incorrect information.  Instead, say that the information is not correct and bridge to another message.

• Seeking forward-looking statements.  Many reporters ask executives to comment on what they think might happen in the marketplace in the future.  Executives of publicly-traded companies need to be careful about not providing opinion that could be misconstrued as “forward-looking statements.”  The executive and communications team should confirm with legal counsel prior to media training to develop a response such as, “While I cannot provide opinions on what might happen in the future, I can talk about the trends our business has experienced in the past based on historical business cycles.”

• Controlling the interview.  Some reporters are notorious interrupters.  Before the executive finishes a thought, the reporter has asked another question.  The executive should take control of the interview and politely but firmly ask to finish the current thought he or she was expressing.  However, this may also be a cue from the reporter that the executive is providing too much minute detail in the answers.  Consider trimming responses going forward in the interview. 

Garet Hayes is senior vice president of public relations at Hope-Beckham Inc., an independent public relations firm based in Atlanta.  She can be reached at ghayes@hopebeckham.com or 404-604-2602. 

Get Used to Change, It’s Getting Faster
by Bob Hope

There is a saying for those people who don’t like change. 

“If you don’t like change, wait a while and see how you like being irrelevant.”

Never has that saying been truer than in today’s world of communications and entertainment technologies.  Things are changing at warp speed, and there is a virtual race for the front spots.

As the president of a communications firm working with Fortune 1000 companies, I live with it every day.  Our clients are creating the technology now that will lead the way in the future, but they are very aware that competitors are also creating new technologies; and their plans may not be the same.

In 1900, a book was published titled, The Turn of the Century.  The great minds of the time were asked to predict what would take place in the 20th Century.  Henry Pritchett, the president of MIT, predicted, “The automobile will be much more important than anyone today can imagine.  Great highways of asphalt or cement will be built from coast to coast, and people will travel long distances on those highways at high speeds.

“However,” he continued, “the automobile will never replace the bicycle as a primary mode of transportation.”

Just 20 years ago, none of us had ever heard of the Internet, Google, cell phones, email, smart phones, the iPod or iPad, You Tube, Facebook or Twitter.  If we wanted to see a movie at home, we went to Blockbuster.  Now, anyone with cable television has access to about 60,000 channels, movies and programs.  That is today, and things are moving faster today than at any time in our history. 

More changes are coming, and, by the way, they will make life better, not just more confusing.

With respect to the slight inaccuracy of the former president of MIT, let me predict a few things we will see not in the long-term future, but just around the corner.

1. One remote will do it all.  It won’t be confusing, it will be much easier than it is now.  Everything technical in a home will operate from one hand held remote.  That includes not only televisions and DVD players but also computers, ovens, telephones, computers, heat and air, lights and anything else electronic.  One of our clients, ARRIS, developed the Moxi Gateway system that does that now.  Other similar systems are being developed and being tested.  It will all be done easily, make perfect sense, and even the least computer savvy person in a home will be able to operate it.

2. Video screens will be paper-thin.  Most of us look with amazement at how much thinner TVs are getting.  However, we haven’t seen just how thin they can get.  SONY has developed a flexible, paper-thin video screen.  Other technology companies are working on their versions.  A large screen TV won’t be the cumbersome thing hanging on walls today.  It will be literally wallpaper and will fill a whole wall.

3. Video screens will work in harmony.  That means that what is on TV will also be readily available on computer screens, tablets and smart phones.  It will all work wirelessly throughout a house or office or even remotely where wireless is available.  Much of this can be done today, but it is being tweaked to make it more readily available.

4. Digital cameras and DVD recorders will be obsolete.  Cell phones already have cameras in them, and those cameras are improving dramatically.  Within a couple of years, the quality of a camera in a smart phone will equal to the handheld digital and video cameras.  There will only be a need for one device.  Our access to the outside world will be through smart phones.

5. Batteries will change the world as we know it.  The battery industry has made dramatic strides because of smart phones, laptops and electric cars.  That progress will continue.  We operate in a world today where the power in our homes, factories and offices comes through wires.  Those wires won’t be necessary.

That’s the future, as I see it.  Let’s read this again in five years and see how I did.

Bob Hope is president of Hope-Beckham Inc.  He’d like to hear your predictions about change that’s just around the corner … email him at bhope@hopebeckham.com.

The Changing Landscape of B2B Public Relations

5 Myths and their True Realities by Garet Hayes

1. Myth – Facebook isn’t for B2B marketing. 

Truth – Business relationships are exactly that… relationships.  Utilize social media as another way to connect with prospects (who want to connect) and create a personal relationship where you share your personality.  And in business-to-business, it’s all about the referrals that generate business.

2. Myth - If my company could only be featured on the front page of our local newspaper, this would be PR homerun. 

Truth – If your company is on the front page of the local newspaper, it’s most likely because a senior officer has been convicted of a crime or your company has had a major breakdown in security.  Focus instead on marketing your talent as experts and getting them quoted in related news articles in multiple places rather than waiting for a feature article that’s all about the company.

3. Myth – If we’re visible we may offend some of our clients. 

Truth – It’s better to be visible and have something to say than to miss a golden opportunity to be seen.  Rather than taking an extreme stand, often reporters just want someone to quote the obvious.  You probably won’t offend any client by stating the obvious.  This activity validates you as an expert or authority on a topic and reinforces your client’s or customer’s choice in choosing your product or service over a competitor.

4. Myth – Don’t spend resources on new technologies; they are fleeting and there is no obvious return on investment. 

Truth – Even a B2B company should consider developing a mobile app if only to have something to promote.  Surely you can find something entertaining that relates to your business such as a Carbon Footprint App.  The visibility the company generates by promoting something different is worth the investment.

5. Myth - The value of PR is difficult to measure. 

Truth – Don’t try to measure every PR action; focus on measuring new relationships and the value of those relationships that may result from an active PR effort.  New relationships can be worth far more than eyeballs generated from a news article.

Garet Hayes, a vice president with Hope-Beckham, utilizes 19 years of public relations experience to build strong brand reputations through proactive public relations initiatives. She works with corporate and consumer clients daily to build relationships with key investor, media and customer audiences.  Before joining HBI, Hayes built the marketing department for Instawares, a national online restaurant supply company. Her prior agency experience includes working with corporate clients at Edelman and Ketchum, two global PR firms with Atlanta offices.

Marketing to Hispanics Now Mainstream

 by John Wise

This is not a political column.  It is a business column about a subject that is politically volatile but offers one of the biggest marketing opportunities available.   

There are nearly 50 million Hispanics in the U.S.  – more than the entire population of Spain, Canada or Australia.  Millions are not authorized to be in our country.  However, the total population is growing rapidly and won’t be affected dramatically by deportation or any other efforts to curb illegal immigration. 

 Think of U.S. Hispanics as a nation within our nation.  Marketing to Hispanics can no longer be an afterthought.  It is a serious and real opportunity for any business.

 I am not Hispanic, but I have been in business marketing to U.S. Hispanics for almost two decades.  I respect their culture, and I have taken the time to understand them as individuals.  I have lived and worked in Latin America.  I understand and am aware of their circumstances, and I appreciate their challenges. I am appalled when I read things about Hispanics that I know just aren’t true.

The foundation of the companies I have built has been based on building respect with people who are leery of flashy marketing and suspicious of gringos – with respect comes trust.

The best way to understand and earn the trust of the vast majority of U.S. Hispanics is to envision yourself plopped down in the middle of a foreign country with very little cash, a lot of ambition, limited education, not speaking the language, but instilled with a strong desire to work hard and make a better life in a new country.  You are a stranger in a country that you have heard is the land of opportunity and was built as a refuge for immigrants…and it feels like a very scary place.

 It is difficult and perhaps a little dangerous to generalize about any group of people, but there are a few truths I have learned.

 1.       Hispanics have earned a reputation as hard workers because they are energetic go-getters.  These are people who, in most cases, had the gumption to leave a difficult life to seek something better.  They are motivated. They should be respected and admired for being industrious.

2.       You can’t market to Hispanics as if they were still in their native countries.   Once in America, they become vulnerable.  Most have been cheated and mistreated, and they have become skeptical and suspicious.  You are marketing to people who find it difficult to trust Americans.

3.       Hispanics in the U.S. are savvy consumers who are price and quality concise. Some corporations think they can take advantage of them, but their marketing campaigns are often met with a sense of skepticism.

4.        Hispanics are very peaceful, hardworking and honest people, for the most part,  and yet, they are often viewed as dangerous or unreliable.  They had nothing to do with 9/11, but after 9/11, they were targeted as the illegal aliens and a risk to our country.  This is a very racist view of good people. 

5.       Unlike many other Americans, U.S. Hispanics don’t typically take on debt.  They deal in cash.  Sometimes it is out of necessity, but it is also part of their culture.

 The population of Hispanics in the U.S is huge.  It should be approached with the same detail for scrutiny of demographics and culture that you would if you were launching a new product in a foreign country for the first time.

Hispanics, as all people, appreciate companies that show they care about them.  Things like including tips on living in the U.S. and helpful information that may have nothing to do with the product you are selling can go a long way in winning trust.

Be respectful that they are in a new country that they want to embrace and love.  They have huge buying power in this country, and we will not be sending tens of millions of people “back home where they came from.”   They have money, and they constitute a big opportunity for companies that address them with sincerity and respect. 

John Wise lives in Atlanta and is an expert on marketing to U.S. Hispanics.  He founded two companies that successfully marketed consumer products to the U.S. Hispanic market on a national level.  He was born in Boston and attended the University of Guadalajara. 

by Clark Dean

During this recession, many CEOs have changed their thinking about office buildings. They have had to cut costs and did so primarily by laying off employees, who represent their biggest expense. Now, they’re turning their attention to real estate, often the second largest expense. For the CEO, commercial real estate went from being a distraction to an obsession and cutting real estate costs has become part of many CEOs’ long-term strategy.

While the landlord is usually considered the lord of the land and the tenant the ant, the power structure has been inverted now – office tenants seem to be in a position of control like never before. Because of this, you’d be hard-pressed to find any business in today’s economy that is more in “the driver’s seat” than firms like Studley who represent large office tenants at a time when landlords are scrambling to pay their bank notes.

The reason for this shift in power is quite simple. Though conventional wisdom asserts that real estate is all about location, location, location, but commercial real estate is really all about cash flow, cash flow, cash flow. Without it, the value of the most extraordinary glass and stone edifice approaches zero.

Until recently, a lot of leasing activity had been frozen by the fallout from the financial crisis. But over the next 18 months or so, there are going to be a lot more deals negotiated, as owners lose their buildings or restructure their debt. Building values will continue to fall, causing more foreclosures. Sometimes, lenders will decide to write off part of the debt instead of foreclosing on owners.

On top of that is the “paper apocalypse” that could turn into a real one. Starting in 2012, a wave of interest-only loans will come due on many office buildings, meaning owners will have to get new financing to stay in the game. But building values have fallen considerably since the loans were negotiated a few years ago. And loan requirements have stiffened. There’s a big increase in the equity an owner needs to get a loan.

At the same time, tenants will be able to drive very hard bargains, often pitting one building owner against another. Some tenants will be able to renegotiate their leases at more favorable rates. Landlords will need long-term deals with good tenants to secure financing. Those landlords who buy buildings in foreclosure can benefit from the depressed prices that give them flexibility to attract tenants with sweeter deals. It’s not a pretty picture for the owners and lenders. It’s very pretty for large, credit-worthy tenants and their reps.

During this age of extremes, there will be big winners and big losers. However, if we have learned one thing it is that the days when trophy office buildings were built on spec are over — forever. No tenant, no loan. End of story.

———————————————————————————————————–

Clark Dean is a senior exec at Studley, a New York-based firm which represents large occupants of buildings in lease negotiations with landlords. Dean is based in Atlanta, where he helps lead Studley’s national corporate services group.