Posted on | January 31, 2014 | Comments Off
Posted on | January 25, 2014 | Comments Off
For a print version with photos, click here.
Can space change the way people behave, interact, and ultimately think? Is it possible for an environment to help create thought?
“This is not a typical association office,” exclaimed a recent guest after walking into the new offices of the National Association of Real Estate Managers (NAREIM). It is an open format environment, simply and elegantly furnished, on the third floor of the iconic Wrigley building. Out the windows are views of Michigan Avenue below, the Chicago river and some of the most exciting 20th century architecture in the world. This is less an office for association staff and more a gathering place for those making new connections, challenging their thinking, and learning how to run their businesses better.
In only a few months, the space has proven to be a flexible stage for strategy sessions, association meetings, and roundtable discussions—and has even served as a location for a student job fair. NAREIM members routinely use the space as a temporary Chicago office, holding meetings with colleagues and clients. And a good number of meetings in the 2014 NAREIM schedule are already planned to take full advantage of the new facility
The Wrigley Building was the first office building to be built north of the Chicago River in the early 1920’s, concurrent with the bridge connecting North Michigan Avenue with the Loop business district south of the river. Designed by the architecture firm Graham, Anderson, Probst & White, the grand new headquarters for the Wrigley chewing gum company was modeled after the Grialda tower of Seville’s Cathedral with white glazed terra-cotta ceramic tile cladding and ornate towers on top of the two office blocks. It was old but new from the beginning. Despite its elaborate detail and old-world inspiration, it had the most modern conveniences of the time and was the first air-conditioned office in Chicago. It stands almost like a gateway to the avenue, turned slightly off the grid of the streets and open to views and light on all sides. At night, bright spotlights light up the façade to glow like a beacon on the river. It may very well be the most recognized building in Chicago – and certainly seems to be the most photographed, as on any day looking down from the office windows, one can see a constant queue of photographers—profession and amateur alike—in the plaza below.
Owned by Wrigley throughout the 20th century, it was sold in late 2011 to a group of investors that include the Zeller Realty Group—managers of the building to this day. One month after the sale, NAREIM signed an agreement to lease space on the third floor of the north tower and move in once renovations were completed.
Here was a rare opportunity to create a stage for discussions—a place where members could connect, think in public, and work through the issues affecting their industry and their businesses.
The celebrated theatre director and author Peter Brook wrote in his 1968 book, The Empty Space, “A stage space has two rules: 1) anything can happen; 2) something will happen.”
Is it possible to create a place where anything can happen and something would happen when NAREIM members came together? With the build out of the new office, we intended to find out.
As a favor to the association, Donna Powers Branson took on the task of overseeing the build out and design of the interior. Drawing from her experience in the theatre, in retailing, and as an independent film art director, Donna had a considerable challenge with an oddly T-Shaped corner space that had not been occupied since the mid 1970’s. Fifteen hundred square feet that encompassed four separate office spaces, finished with thin veneered cabinets and radiator covers, gold-colored carpeting, and a dropped ceiling of acoustical tiles. Long abandoned paint peeling and flaking off the walls, ceiling tiles missing or dropped on the floor, and electrical wiring hanging ominously from the ceiling, it initially felt less like a headquarters for an association and more like the setting for a horror movie.
It was time to start from scratch. Everything was stripped bare—walls and cabinetry removed, the remaining ceiling tiles taken away. The morning’s light lit the entire office, burning clean the gloomy darkness that once hung in the air. It was immediately apparent; this bright, open light was what we would build around.
According to Donna, “To retain the best aspects of the space, we decided to keep it as open and spare as possible. NAREIM is all about new perspectives, flexible thinking, and looking forward. The space needed to reflect that.” No solid walls were built inside the space; no drop ceilings installed; no cubicles or dividers. Instead of covering up the radiators—they would be kept open, cleaned up, and given a fresh coat of paint. The nicks and scrapes that a building acquires over 80 years of use would still be visible, but made fresh and clean.
Since the ceiling was perhaps the roughest surface—and crowded with everything from conduit and fire sprinklers to HVAC ducts—most tenants would have simply installed another drop ceiling. Instead, to create the visual effect of a more finished ceiling below the mechanicals without blocking air-flow or lowering the height, lighting pendants were used. Reproduced from a design quite common in 1925 when the Wrigley Building was first constructed, the hanging fixtures mix modern with old with sculpted fluorescent bulbs that echo the shapes of early Edison filaments.
Furnished with simple and moveable furniture, the intent was to allow each meeting to adapt the environment as needed. At the same time, the environment needed to stimulate new thinking. According to Donna, “The last thing we wanted was ‘conventional’ furnishing. Instead of traditional office furniture, we used a mix of clean mid-century and industrial pieces with some historical references to Wrigley’s history. The addition of art added an occasional pop of color as well as wit.” The mix of mid-century and industrial is well represented by the meeting tables made from reclaimed barn wood set on wheeled legs of galvanized steel and simple chairs, copies of the classic 1957 Arne Jacobsen Model 3107 chair that were stained a deep indigo blue.
Instead of carpeting, the floor was laid with vinyl tiles made to look like wood planks—easily cleaned and maintained at a fraction of the cost of true wood floors. Using a hard surface created an uncommonly high level of energy as the acoustics became much more lively. The dead acoustical effect common in modern offices created through carpeting and drop ceilings can be very useful for audio recordings or conference calls as there is no echo when people speak. However, those kinds of acoustics can also have a deadening effect on individuals’ energy levels—and make it difficult for someone to be heard across a larger room without amplification. When people hear their voices bounce back from hard surfaces, it not only provides a boost to energy levels, it also helps the speaker intuitively moderate their voice to be comfortably heard by others.
That is why most public spaces built before microphones were commonplace have a similar acoustical signature. The environment functions as a literal amplifier of sound and energy—and in the process allow speakers to be more intimate and spontaneous than they would if handing around a microphone to speak.
Simple, easy to adapt, and loaded with visual wit, the new NAREIM Headquarters has arrived. Members now have a meeting space in Chicago to drop in on, engage in discussion, and connect to their colleagues. This is a place where anything can happen and something always does.
This is not a typical association office, but perhaps it should be.
Posted on | November 20, 2013 | Comments Off
Posted on | September 13, 2013 | Comments Off
Real estate matters…quite a bit more than many people assume. Not only does real estate account for a full fifth of the gross domestic product, it is the infrastructure, ecosystem, and structure for a fully functioning economy. The boxes we define as offices, stores, warehouses, and homes are only the physical manifestation of a broad range of activities that tie every aspect of our society and economy together into a broad and deep network of trust. The pursuit of real estate investing is a valuable and essential part of building and maintaining civilization.
…and it requires quite a bit of thoughtfulness.
There is an assumption that real estate is simply about the deals; that is, whoever gets the best deal, either the purchaser or the seller, wins. And though the ability to negotiate better than the counterparty of a deal is a key part of success in this business, it is not everything. Real estate professionals also have to understand, anticipate, and help to shape economic activity throughout the term of an investment. Purchasing that investment at a low price and selling it at a higher price is absolutely necessary, but there’s a lot more to it than negotiating terms.
According to the tired old cliché of real estate, the three most important elements of successful real estate are “location, location, location”. In some ways, the cliché – like most clichés – is too facile to explain the intricacies and importance of this business and it implies a somewhat defeatist or passive view of investing. In other words, it is difficult to swallow the notion that “location is destiny” – especially when real estate investors have had quite a bit of influence in the discovery, building, improvement, and creation of new locations around the world.
In 2009, the New York Times published William Safire’s analysis of where ‘location, location, location” came from. According to his research, the earliest recorded mention of the phrase he could find was in a 1926 Chicago Tribune real estate classified ad that said: “Attention salesmen, sales managers: location, location, location, close to Rogers Park.” This is especially ironic to anyone who invests in Chicago real estate since property values in Roger’s Park are typically half of the average Chicago property.
But if the rules of real estate aren’t “location, location, location” what are they?
Here are three new rules to consider: Density, Diversity, and Shared Ownership.
What makes for a successful location? It has quite a bit to do with how many people want to spend time there. If your building is where the most people want to be, it has the highest potential for revenue. The denser people are, the more opportunity there is, the more value there is. In some ways the real estate profession creates the infrastructure for density. Real estate makes density possible.
Diversity of people, of cultures, of uses, and of economic activity is essential for thriving places, cities, and communities. In farming, it may be possible to improve crop yields if one devotes a large area to a single crop, but the moment conditions change, perhaps due to difficult weather, an invasion of parasites, or a shortage of water and nutrition in the soil, that monoculture is less likely to survive than farmland planted with a variety of crops. Cities and communities behave much the same way. Less diverse economies like Detroit enjoyed tremendous growth at first – built around one very successful industry – but are particularly vulnerable to economic shocks. More diverse economies are able to handle changes in the economy better and return to full productivity sooner. As Ecclesiastes said, “divide your investments among many places for you might not know what risks might be ahead.”
At the same time, a diversity of businesses, cultures, and people promotes faster formation of new businesses, new technologies, and new ideas. A successful real estate investment depends on the economic success of the people and businesses that occupy the asset as well as the surrounding area. Diversity creates new growth and mitigates the natural volatility of a business cycle.
Every tool at the real estate professional’s disposal is essentially a device to promote shared ownership – whether it’s the JV agreement, the limited partnership, the GP-LP relationship, the mortgage or the lease. Every agreement and contract is designed to bind all the parties as much as possible in a shared responsibility for the success of every asset. The tenant needs to feel that they share in the ownership of a building as much as the lender or equity partner; the property management team needs to own its success as much as the developer or owner. Everyone should be able to come together and work out the problems when the asset falls and share in the rewards of its success when it prospers.
At its best, the commercial real estate industry is all about sharing a sense of ownership. And the most successful markets are passionately “owned” by all the participants.
For the best real estate investors, destiny is not just something in the stars, or in some pre-ordained quality of location, but rather in ourselves and in our ability to solve the challenges presented by a swiftly changing world.
Posted on | July 24, 2013 | Comments Off
Gunnar Branson appeared recently on the CBC’s Lang & O’Leary Exchange to discuss the ongoing densification of cities and its impact on commercial real estate in Toronto.
Posted on | May 13, 2013 | Comments Off
Are we there yet? The eternal refrain of children eager to get to a promised destination is a fair question to ask after years of uncertain market conditions, slow to recover labor markets and constant governmental stumbling. Unfortunately, it seems that the “parents” driving the economic car have less of an idea of how and when we will arrive than they ever did.
(For a print version of this report, click here)
Fortunately, as Abba Eban, the mid-twentieth century Israeli diplomat once pointed out, “Men and nations behave wisely once they have exhausted all the other alternatives”. If he was right, there may be hope that the past five years of economic roadblocks, confusing signs and political road rage could eventually give way to more stable, more prosperous and perhaps even less confusing times.
Meanwhile, real estate investment managers have to find their own path to wisdom. At NAREIM’s Spring Executive Officer Meeting this March in Santa Monica the focus of the discussion was on the landscape of economics, politics, technology and labor – and how these forces will affect smart investment strategy for the foreseeable future.
Insight abounded from thought leaders such as former White House Press Secretary Ari Fleisher on changes in the political climate over the past 10 years; from Los Angeles Mayor Antonio Villaraigosa on ways that big cities are reinventing themselves; and from physicist Geoffrey West on the surprising mathematics of urban growth and from many others. Despite the chaos at the macro-level, cities are growing, changing and evolving as overwhelming demographics and technology are re-shaping our world, and real estate’s role in it.
Were any definitive answers found during this meeting? No. But many questions and many more discussions illuminated how leaders will need to face the challenges of the next several years, known and unknown, if they wish to continue succeeding. A few points-of-view in particular are worth taking into account include:
The Economic View
The economy continues to be difficult to understand, much less predict, but it is not uniformly bleak. While describing the U.S. economy as “foggy with a crack of sunshine,” Doug Herzbrun, Global Head of Research, CBRE Global Investors, suggested that it’s possible to overstate concerns about the global economy. Any continuing weakness in the Eurozone will tend to “stay in the Eurozone,” and China’s recent economic lull is already reversing itself, he noted.
Herzbrun also dispelled the notion that the U.S. is in a jobless recovery, noting that growth has averaged about 50,000 new manufacturing and construction jobs and 150,000 new private services jobs per month. The stock market—still the best single indicator of economic sentiment–has experienced a repeating pattern since 2010, with a strong first quarter followed by a mid-year slowdown, he said. Although it is too early to tell if that cycle will repeat this year, The Labor Department’s April jobs report of over 600,000 new jobs created since January – and an overall unemployment rate of 7.5% suggests the economy may have sufficient momentum to disrupt this annual pattern.
That would be a good change since, according to Michael Zietsman, Managing Director, Jones Lang LaSalle, real estate and the general economy have followed the same pattern. “In the past three years the real estate markets have been schizophrenic,” he said. “They started out with a roar and ended with a whimper. I think 2013 will be different.”
Zeitman noted that there is currently twice as much capital chasing real estate than there are properties for sale. Total investment in 2012 exceeded $250 billion, outpacing the previous year by 19 percent. Today, many investors have aggressive acquisition targets and diminished disposition goals, indicating there is room for prices to rise further.
When analyzed by property type, there continues to be reason to believe that there will be continued growth prospects. In the past couple of years, retail and multi-family have been the clear winners. There is nervousness about some retail, given the continued disruptive nature of e-commerce, but high street retail is back to peak in many areas. Service and experience focused retail like the Apple Stores continue to deliver jaw dropping per square foot sales. But multi-family still seems like a safer bet going forward. According to Herzbrun, “looking forward I would expect apartments to continue to be top performers. They are really the only asset class now that has real, sustainable ability to increase rents.”
With office, it’s a bit tougher to see clearly. “The NCREIF index makes one wonder why so much money is plowed into office,” Herzbrun observed, “it had the worst return and the highest level of risk.” However, during an economic upturn office is generally the strongest property type and construction of new supply is at an all-time low. Depending on how businesses use office space for the next several years there may be cause to invest.
Industrial is about to get interesting. With the expansion of the Panama Canal about to be completed, there will be a rebalancing of market share across the port cities in the US – and according to Herzbrun, “manufacturing is recovering and the U.S. is more competitive than it has been for a while. As an economy we are producing more goods – albeit with fewer people.”
All this means a need for new and reconfigured facilities able to handle more automation, larger capacity and more efficient logistics. “The strongest demand right now is for the really big boxes – 1 million square feet or more for e-commerce fulfillment centers – and there will be further changes to space requirements. There is still a lot of functional and locational obsolescence in industrial space.”
At the same time, investors are also digging deeper for better cap rates, going into smaller cities with growth prospects, such as Seattle, Austin and Denver. Investors are also looking harder at Chicago and Houston, where cap rates on core office buildings are more than a full point higher than they are in New York and Washington D.C.
On the real estate fundamentals alone, New York City “prices defy logic,” Zeitsman said. Prices are setting new records at a time when many renewing legal and financial services tenants are reducing their space per employee by as much as 20 percent.
But Herzbrun observed that real estate prices are partly a function of the bond market. “There is a misconception that commercial real estate is expensive. If you compare the ratio of cap rates with bond rates, the US is experiencing the largest spread in history, making real estate extremely attractive as an asset class,” he said.
But the question remains – how long can the differential between bonds and real estate returns be sustained? And how much will governmental forces continue to influence the real estate market in the months and years ahead?
The Political View
“Things are happening,” enthused Jeff DeBoer, President and CEO of the Real Estate Roundtable, “TARP, Obamacare, the debt ceiling and sequestration are all outcomes of the gridlock in Washington. It’s important to note, however, that this gridlock is really a reflection of the split in the country itself.” But there is more movement today than there was only a few months ago.
After years of frustrating inaction, changes in the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) might actually occur in the next several months. Currently, foreign investors can hold up to 5 percent equity positions without worrying about withholding considerations.
DeBoer noted that there has been cause for hope in recent months. Congress has discussed increasing the withholding threshold to 10 percent and in April President Obama’s proposed infrastructure bill included a measure exempting foreign pension funds from the extra tax on gains, designed to place them on an equal financial footing as domestic investors. If progress of any kind is made in this area, as is expected, there will likely be a significant impact on the amount of non-US capital coming into real estate. “We are right on the cusp of a major decision that would overturn the way distributions to foreign investors are treated.”
Discussion has waxed and waned since the election regarding government sponsored entities (GSEs) Fannie Mae and Freddie Mac. DeBoer observed that the GSE reform debate has extreme views on both sides, with some politicians believing Fannie and Freddie should go away, and others believing that a market where GSEs providing virtually all home mortgages is not a problem. “Neither of those views is right,” said William Walker, President and CEO, Walker and Dunlop. “What we need is more of a balanced long-term solution with these enterprises.”
Last year Freddie and Fannie collectively provided $33 billion to the multifamily market, representing 90 percent of all capital supplied to the sector. The GSE’s provided a much needed stabilizing force for the entire sector and the economy. Looking ahead, Freddie and Fannie are working on a joint securitization program and also looking at ways to bring more capital to single family markets.
By contrast, the $750 billion of TARP funds loaned to banks four years ago were supposed to increase market liquidity, but banks were unable to put that capital to work without the infrastructure in place, according to Daryl Carter, Chair of the National Multi Housing Council and CEO of Avanath Capital Management. “What people underestimate is the value of the infrastructure developed by the GSEs to deliver multifamily capital to the market. That infrastructure works incredibly well.”
Participants in Fannie Mae’s Delegated Underwriter and Servicer (DUS) program for multi-family—unlike most residential MBS loan originators—must hold the first-loss position and service the loans they originate. “It is the only securitization program where private capital holds the risk,” Walker said. “The alignment of risk between private and public capital is why Fannie Mae delinquency rates are very low.”
Multi-family investors pay a price premium for multifamily product that’s directly attributable to the liquidity provided by Fannie and Freddie, as the investors have confidence they can refinance at the end of the loan term, Walker said.
If the government stopped guaranteeing the GSEs and Fannie and Freddie disappeared, the economic disruption would be significant. “The government backed mortgage securities market is the second largest market in the world. If Congress did something to alter that market there would be a big global reaction,” Walker said. At the same time, with no risk retention by loan originators in the single-family market, “you have a system that is bound to fail again.” A better solution would be to bring single-family lending rules more in line with GSE multi-family origination practices.
The Technological View
While economic and political factors have always been central to real estate considerations, disruptive technological change is becoming far more important than ever before as the ways people live, work and play has only begun to shift.
Office in particular seems to be vulnerable to changes in technology. Trends like telecommuting, hotelling and a reduction in the space allocation per employee continue to drive demand for space down even as the population rises due to the millennial generation and immigration. In Q4 2012 the national office vacancy rate averaged 18%. As corporate profits increase and companies resumed hiring, the office vacancy rate has been stubbornly stuck in the high teens.
“I predict office vacancy rates will get even worse in the coming decade because the underlying business model for commercial office space is fundamentally broken.” said Jeremy Neuner, co-founder and CEO of NextSpace. For the first time in history people can work from anywhere they can access wi-fi. “One of the places they will work the least is in office buildings.”
By 2015, there will be 1.5 billion mobile workers worldwide. By 2020, 40 percent of the American workforce will be contingent or fractional workers, earning their income from multiple sources rather than a single source, Neuner said. But all is not bleak for owners of office buildings. Alternative co-working spaces can be offered to workers on a paid membership basis vs. a pure per square foot rental. Contingent and fractional workers often need a place to work that is flexible, convenient, and works much the same way as a Zip Car or country club membership. Neuner’s company has had great success selling memberships to workers in multiple locations – deriving a much higher return than any lease could deliver.
According to Neuner, we should, “Stop thinking about leasing space and start thinking about selling an experience.”
At the same time, there is some reason to believe that demand for more office space could be in the offing. “The cost of office space is declining as a percent of total operating expenses, now down to just 2.4 percent,” said Kerry Vandell, Dean’s Professor of Finance and Director of the Center for Real Estate at the University of California-Irvine. “If you add in some behavior finance thinking it may not be the case that Gen X and Gen Y really wants a hotelling work life.” In the war for talent, larger office space and more amenities could be an inexpensive tool for employers to attract and retain the best and the brightest.
Will office space demand rise or fall? Will businesses rent by the square foot or by the seat? The answers will likely become clearer over time, but today it is almost certain that there is change afoot in the way businesses and individuals use office space.
Retail, of course, is even more affected by Internet and mobility trends. Today, e-commerce comprises 4.4 percent of all non-grocery retail sales, which not only threatens retail bricks-and-mortar profits but undermines state and local tax bases, which are dependent on sales tax revenue. That market share is only increasing every year. Forrester, the information technology research firm, predicts that e-commerce will approach a 15 percent share in just a few years.
Retailers have responded to this growing threat with multichannel marketing initiatives designed to create a seamless experience for customers who may not differentiate between shopping online, by phone or in stores. Increasingly, consumers want to shop online but pick up merchandise in stores, or the converse—checking out products in stores but buying online to avoid tax or to seek a lower price. This strategy may involve changes to the layout and design of retail stores, but the more immediate revolution is in the distribution chain. Supply chain experts have found dramatic cost efficiencies can be achieved through fewer distribution nodes, equipped to handle e-commerce fulfillment and traditional store shipments under one roof.
Retailers are also considering ways to maintain traffic levels in the face of e-commerce competition by offering customer experiences that can’t be replicated online. Chris Macke, CBRE Senior Real Estate Strategist suggested there may be a growing real estate opportunity in the intersection of retail and one of the most reliable growth industries of our time: Healthcare. Specifically, small retail centers are beginning to integrate with and embrace health related service providers in their tenancy – and are creating remarkable synergistic foot traffic for traditional retailers.
Macke cited contemporary examples of “medtail” including Walmart stores with Vision Centers, CVS stores hosting Minute Clinics and Take Care clinics within Walgreens stores. “It isn’t difficult to imagine malls with 10 percent or more medical tenants in the future–not just doctors, but heading aid centers, medical supply companies, physical therapy centers, and wellness centers,” Macke said.
Medtail may be increasingly important to shopping centers as healthcare spending increases for an aging baby boomer population and displaces the share of dollars they used to spend on consumer goods. The marriage holds other advantages as well: doctor’s visits take place during the day when retail traffic is low and parking is convenient for patients; medical tenants will accept hard-to-rent elbow space; and physicians generally sign longer term leases and have higher renewal rates than other retail tenants. The successful retailers of the future may need to know as much about health care as they now know about fashion trends.
No Clear View to the Future – the True Test of Leadership
Discussions in March kept returning to questions of leadership, of human capital, and of how to navigate uncertain, even turbulent times with the right team of the right people. As Matt Slepin of Terra Search Partners put it, “Real Estate is a business about deals and capital…but increasingly, it’s as much a business about people, teams and vision. It’s imperative that we try to look beyond the immediate transaction, beyond the hiring of one superstar, and towards the development of a more resilient, more effective, more successful organization.”
How do you build a team for the challenges of an uncertain world? According to opinions expressed at the meeting, it is important to not only know what your investment strategy and thesis might be, but also to know what differentiates your firm and your team. There’s a need to not only how you will succeed, but why you will succeed – even when the path doesn’t go as planned.
There seems to be a shortage of human capital. Very few young people have come into the real estate business in recent years and the bench strength of many investment management firms falls off under the age of 40. But based on the level of talent represented by “NAREIM Fellows” Kyle Reardon of Cornell University’s Baker Program in Real Estate, Whitney Smith from McDonough School of Business at Georgetown University and Elliot Weinstock of USC’s Marshall School of Business, there is hope for our future. Investment management firms, however, need to take a leadership role in reaching out to University programs to find new talent, help develop real world skills and ultimately create a clear path for young people to take leadership roles in real estate firms of the future.
NAREIM board member Paul Bernard is taking the lead of an education outreach committee to connect with Universities and students around the country – and involve young people in NAREIM internships, meetings and research activities.
Fortunately, young people coming into our business have different experiences than current leaders do – they see things with fresh eyes, they understand intuitively how young people want to live, work and play. They may not understand how to make a deal today – but they likely have insight on what we will need to do tomorrow.
These are uncertain times, and it appears that no one is expecting the “easy money days” of years passed to return anytime soon. Leaders will need a level of intestinal fortitude, flexibility, and humility that may not have been required before. Just as guest speaker Mayor Antonio Villaraigosa, after shattering his elbow in a bicycle accident, went directly to his staff saying, “This is a teachable moment.” and set the impossible task of making Los Angeles a bicycle friendly city…with over 1,600 miles of new bicycle lanes to come – real estate leaders need to be able to jump back from the accidents and drive their future.
Shakespeare once wrote, “Wise men never sit and wail their loss, but cheerily seek how to redress their harms.” The road ahead for real estate leaders continues to be challenging, but we can and will handle it.
Posted on | December 26, 2012 | Comments Off
Gunnar spoke at a recent regional TEDx conference in Naperville, IL.
Posted on | November 29, 2012 | Comments Off
Posted on | November 1, 2012 | Comments Off
Gunnar Branson is scheduled to speak at the Naperville TEDx event November 9th. Click here for more information.
Posted on | August 3, 2012 | Comments Off
Almost four years after the collapse of Lehman Brothers and the beginnings of the most challenging economic recession since the Great Depression, it has become clear that our world has changed. More than a straightforward de-leveraging of the economy or a re-strengthening of the global banking system, (as challenging, painful and seemingly impossible those tasks are), it appears that some assumptions about how the economy works, how to invest successfully, and how to anticipate the future may have to be re-evaluated. The world is unlikely to go back to where it was before. But if that is the case, where is it going and how do we plan for the future?
As once explained by the 18th century Irish politician, author, and philosopher Edmund Burke, “You can never plan the future by the past.” Well understood by commercial real estate investors, this truism is prompting leaders to focus their thinking on what is happening now and what could happen in the future, not on what might have worked before. In early June of 2012, a small group of commercial real estate leaders assembled by the National Association of Real Estate Managers (NAREIM) gathered at a small hotel in Chicago for the first annual 2020 Investor Summit to discuss changes, big and small, and explore new ideas about real estate investing.
The following areas are discussed in the report:
- Real Estate Usage – technology and demographic shifts are changing how people use real estate – and will likely make this recovery dramatically different from past recoveries.
- Investment Capital – An exciting new development in defined contribution plans may represent a huge potential source for new real estate investment capital.
- Human Capital – As the economy recovers, fund raising, business continuity, risk and governance all have a significant and challenging human capital aspect to be considered.
- Regulations, Accounting and Transactions – Changes in accounting and structuring of deals will have a meaningful impact on how investment managers need to conduct their business.
- Information, Technology and Process – Is it time now for the real estate investment management firms of today to upgrade their approach by buying process rather than technology?