What I Heard from the Global Property Leaders at the ULI Spring Convention

I’m always excited when I get emails from Jean-Claude Goldestein of CREOPoint, covering the latest major real estate conference. This time it’s the ULI Spring Convention which took place a few weeks ago in Boston. Here’s what the global leaders had to say.

Hope is back:
3,000 leading U.S. property professionals gathered in Boston for the ULI Spring Convention. I had a chance to meet a number of fascinating people listed below and reflect on their insights. My first impression was that the mood was brighter than at the Fall Convention. We are not out of the woods yet but the survivors were less concerned about a double dip recession than a month earlier at MIPIM. I guess spring is in the air for CRE as Ray Torto, CBRE Chief Economist, had anticipated

What I Heard from the Global Leaders

If you are interested in what some of them said about the market, technology, and the many changes that are in the air for our industry, watch this short “Best of” ULI video and scroll down.

From left to right, Steven Brittan (Principal, Burt Hill), Relina Bulchandani (Director IBSG, Cisco Systems), Colin Dyer ( CEO, Jones, Lang LaSalle), Gayle Farris (Chairman Emeritus, Forest City Science + Technology Group), Stephen Furnay (CEO ING), Ken Hubbard (EVP Hines) and Rick Huijbregts (VP Vertical Sales, Cisco Systems)

From left to right Michael Joroff (Sr Lecturer, MIT School of Architecture), Scott Malkin (Chairman, Value Retail), Chris Pike (Director of Research, USGBC), Charles Reid (EVP Design & Construction, Gale International), Howard Roth (Global Real Estate Leader, Ernst & Young), Anthony Townsend (Director of Technology, Institute for the Future) and Sam Zell (Chairman, Equity Group Investments)

____________________________________________________________________

“I’m supposed to be the grave dancer but there are no opportunities, except maybe hotels and all this crap that’s in all these little banks all over the U.S.”

- Billionaire investor Sam Zell

_____________________________________________________________________

Is it Springtime for Commercial Real Estate?
Howard Roth, Global RE Leader for Ernst & Young, added: “Unemployment is not going back down to 5% soon. We have economic challenges and CRE is over-leveraged so this will take some time to work it’s way through the system. Meanwhile REITs have survived and many have full coffers they can use as a cushion and a war chest.”

For now, said Michael Graziano, MD Goldman Sachs, “There’s a pot of money out there, but there is not a lot of trading, and cap rates have dipped.”

Frank Cohen, Sr MD, Blackstone Real Estate Advisors warned that Blackstone was “definitely more focused on offense”

Stephen Furnay, Chairman & CEO, ING said that “A lot of people will pick up assets that need some work done. Real estate is not like fine wine that sits in a place where nobody puts money”

Alan Leventhal, Chairman and CEO, Beacon Capital Partners, thought in 4-5 years, we’ll see a return to strong fundamentals in the U.S. thanks to the lack of new supply

Larger players, especially REITs, are consolidating while getting more specialized, noted Colin Dyer, President and CEO of Jones Lang LaSalle. “They have deep enough pockets to tackle international opportunities.”

Walter Rakowich, CEO Prologis, concurred and he saw development opportunities in Europe and Japan, partially thanks to low construction costs.

Sam Zell wondered why one would invest in low growth developed economies. For him, overseas means “emerging markets where one makes a conscious decision to trade high growth for the rule of law.”

Online Social and Professional Networks Grow to Compliment Physical Places
Michael Joroff, Sr Lecturer, MIT reflected that “it used to be that the event was only when I was there, but everything is going on besides that online. Used properly, the internet is a great way to link with people.”

When I asked Sam Zell whether he was in favor of online networking to improve the CRE industry, he replied that we needed to “encourage innovation and push our society out there”

Gayle Farris helped position Forest City as the leaders in the development of technology office parks. We acknowledged that it would have been good to connect online with peers from countries such as Germany, Sweden and France who are more advanced from a sustainability standpoint.

Scott Malkin, Chairman, Value Retail, predicted that the “engine” that will power the next economic boom will be human creativity, and the places that meet the needs of the most talented and innovative workers will be the most successful. He was also interested in shopping center operators like Hammerson starting their social networking initiatives to better connect themselves, their tenants and end consumers.

Steven Brittan, Principal at Burt Hill, designs large multi-use urban developments. In addition to confirming that “we have to accept that cyberplace is also a place”, he also “emphasized that the future was about people. It’s about changing the cultural mindset and it has to be holistic.”

Relina Bulchandani, Director with Cisco IBSG Connected Real Estate, agreed. She suggested that “the entire lifecycle needed to be rethought through with more integration between people interested in regulations, standards, design, intelligent buildings, monitoring etc.” I thought that tied in nicely with CREOpoint vision to help break down silos across professions and markets.

Ken Hubard, EVP Hines said that it was hard to change tenant behavior and that it can’t be top down since you “can’t predict who will say that it’s an important thing to do”

Chris Pyke, Director of Research, USGBC made the point that “we lack integrated IT to understand our product in its whole lifecycle. Why so many intensity metrics when we should also be measuring the experience of the occupant and the improvements in productivity?”

Rick Huijbregts, VP Cisco Systems, said that they had “evolved to deliver innovative solutions to the CRE industry and transform how things are done.” I’m looking forward to it!

Anthony Townsend, Director of Technology at the Institute for the Future, suggested that “location services and social media data mining would help make places and organizations more productive”.

What do you think?

Similar Posts:

• ULI Fall Meeting Review: What the Global Leaders Had to Say in San Francisco
• What I Heard From Global Leaders at MIPIM 2010
• REITWorld Review: What the Global Leaders Had to Say in Scottsdale

Tweet This Post