SHOULD ALEX PULL THE PLUG OR TAKE THE DEAL?
Alex should accept the Kazakh investors’ offer and profit from his efforts. Can he make
more? Potentially. But he may lose it all. And the danger isn’t worth it now. A pandemic and an
economic calamity follow. Many moving pieces must align. Employers and employees alike
realize the benefits of working from home. Modern technology allows many people to work from
anywhere at any time. Before the crisis reached North America, corporate real estate costs were
questioned. For miners, they will keep cutting and optimizing. Not that work isn’t important. No
longer places where we work, but places where cultures and ideas may meet. Flexibility is vital in
the talent battle. Each project is unique. Before making a decision, Alex must consider the deal’s
risk, each partner’s perspective, and exit need. So, he should examine global and Russian macro–
economic conditions. A 5.2% reduction is predicted by 2020. In the Moscow office market, Alex
should review supply, demand, and pricing. The Covid-19 issue has increased vacancies in Eastern
Square and elsewhere.
Notably, economic downturns frequently bring cheaper development costs. Is there enough
work? Will raw material prices rise? How to get planning approval? Can Alex discover Krasny’s
job and equity? A cost and revenue risk assessment are required. To learn more about the market
and tenant preferences, he could talk to local brokers. Alex is, after all, self-driven. Accepting the
contract today probably protects his employer’s money. This might be a career killer. And a second
opportunity. Every property has one. When the market suddenly shifts, there is usually a push to
sell. Instead of severing the cable, Alex should gather more information, evaluate choices, and
brainstorm. Emotions often push you out of high-stakes situations. Incomplete information is never
a good plan, and it seldom works.
This story is based on Sheila Botting’s experience with a similar real estate enterprise in
Moscow in 2008. It wasn’t only the period or the scenario that worried me. She had to confront
the question, “Can I, together with my team, manage the situation’s uncertainty and provide
exceptional solutions for all?” Her instructors had always advised her to do during market
disruptions: break huge problems down into smaller ones, discuss ideas as a team, assess their
viability, hear their major stakeholders’ concerns, then they looked for ways to keep them on track.