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Sugar-coating the recession.

Byline: Sarabeth Sanders

These days, firms don't downsize, they "rightsize." Companies no longer make budget cuts, they "reduce to competitive levels."

The current downturn has ushered in a new wave of vocabulary for real estate firms that are trying to spin bad news.

Lenders may be asking for 25 percent or more of the purchase price on a new apartment up front, but rather than referring to it as a down payment, many have recently started calling it an "investment." Meanwhile, that deed in lieu of foreclosure was really just a "loss mitigation technique." And no, that wasn't a price cut. It was a "price correction."

As the Web site Cityfile recently observed, restaurants across New York have been "closing for renovations," until, after a few weeks or months, they're finally ready to reveal what insiders knew all along: Reopening was never in the plans.

To some, euphemisms like these are a pointless exercise. "It doesn't matter what moniker you give these things," said David Schechtman, senior director of Eastern Consolidated's turnaround and distressed group. "We are in a down market, whether you call it what it is or candy-coat it."

Still, that hasn't stopped firms from trying. One tactic is turning simple but unforgiving phrases into jargon in order to lessen their impact. Case in point: "rationalizing the workforce."

"It means 'We're gonna make job cuts,'" said Howard Nottingham, executive managing director at Studley. So why not just say that? "Because no one's ever heard of some of these other terms, and maybe they can put a seemingly different spin on it."

Indeed, many PR-friendly terms for cost-cutting turn out not to be euphemisms so much as vague or esoteric.

Having one person do twice the work sounds somehow less stressful when labeled "increased utilization," "managed redundancy," or "productivity increases."

In the development sector, Steve Solomon, head of the real estate practice at the PR firm Rubenstein Associates, said one go-to phrase is "actively negotiating" if you have empty space to lease or sell. And "cash-flow issues" is a more palatable term than "bankrupt."

"Instead of saying, 'We're in deep trouble and going broke,' having 'cash-flow issues' makes the person reading it [feel] a little bit more comfortable," Solomon said.

Whether creative vocabulary makes a difference in the market is anyone's guess, but one thing's for sure: "When the markets change, a whole new wave of catchphrases and euphemisms comes in," Solomon said.
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Author:Sanders, Sarabeth
Publication:The Real Deal
Date:Jan 1, 2010
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