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The Secrets of
Their Success
Do you have what it takes to be a CEO? And what does it take, exactly?
In a recent study of 19 CEOs in the real estate industry, FPL Advisory Group found
that "While a person's academic background is always important, multiple degrees don't appear to be the key to success. Secondly, youth is quite acceptable in a CEO. Furthermore, CEOs don't tend to job hop, but are careful about joining companies where they can gain well-rounded experience."
Using the monthly manufacturing output figures from the Federal Reserve Board as its
primary indicator, AMB says that the Industrial Absorption Indicator will more accurately target
space demand because it will not be influenced by economic indicators that are not necessarily
relevant to commercial real estate.
In addition, the study found that broad-based functional experience
is critical, including finance/capital markets, acquisitions/development and operations/asset management (and to a much lesser extent, marketing and construction). To what did the CEOs attribute the secrets of their success?
At the top of the list was the ability to hire, retain and motivate great people.
In the final analysis, the report stated, "Management and leasing skills, as well as hard work and listening skills seem to be the most common attributes among the successful CEOs."
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The Shape
of the Recovery
Here's the latest parlor game for you erstwhile predictors of economic rebound: "Guess The Shape of the Recovery." In various presentations and articles, we have heard economists suggest the following shapes, from optimistic to Oh-No. What's your favorite?
For more information
"Economic Outlook" Mark Zandi, Economy.com (Excerpted from a PowerPoint presentation at NAIOP's Capital Markets Conference, January 2003)
The Air Down There
Say goodbye to conventional overhead ventilation systems — air circulation has taken on a whole new look...and feel. Underfloor air distribution, which has been used in Europe for more than two decades, is showing up in office buildings in North America. With features that include temperatures that are better regulated than with conventional systems, individual control and improved air quality — not to mention installation and operating cost savings — underfloor air distribution seemingly resolves many of the issues that tenants have with ventilation systems.
Graphic courtesy of InterfaceAR
"Understanding Underfloor Air" |
As shown in the accompanying graphic, underfloor air systems use raised flooring (eliminating the need for complicated ductwork) and don't rely on the heat generated by overhead lighting to warm the circulating air. Instead, natural convection causes the air to flow upward through floor outlets and rise through the "mixing zone" into the "occupied zone" already conditioned to a suitable temperature. As a bonus, overheated air (and any contaminants) continue to rise and are removed from the area by the return air duct in the uppermost zone.
An additional benefit of underfloor air distribution systems is flexibility. If a workspace is reconfigured to accommodate additional people or a different industry, conventional systems usually require extensive alteration before the space is ready for occupation. With an underfloor system, floor vents can easily be moved to work with the new office design.
What goes up must come down, the saying says — but in the case of underfloor air distribution, it looks like the only direction is up.
Green Up Your Design
Sustainable design is the buzz these days, with more and more architects, engineers and developers looking to incorporate "green" into their projects. From an environmental perspective, building green is a win-win, with its emphasis on renewable energy, resource recycling and redesigning building form to take advantage of natural light.
Economically, sustainable design is showing positives as well, primarily in tax incentives and property management costs. Tenants welcome the innovation in design as well as the savings in operating costs. And to illustrate the impact of green in real-life terms, we offer the following:
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Unplugging
If one high-capacity 120-foot wind turbine were located on top of just one building in each of the 2,100 blocks of Manhattan's city streets, it would provide enough clean and renewable energy to air-condition more than 2,000 20-story buildings for one year. |
Breathing Again
If one 20-story building reduced its yearly air-conditioning requirement by 50 percent — by using operable double-skin windows, displacement ventilation systems and light shelves — 418,000 pounds of coal would be saved every year. |
Water Me
If all the rain that fell on the Pentagon's roof were collected over the course of the year, there would be 28.4 million gallons of water that could be used inside the building. That's the equivalent to the daily water use of 227,200 Americans. |
Rebuilding
If the window frames in a skyscraper the size of the Empire State Building were made of wood, which is a renewable material and requires very little energy to produce, and not aluminum, which requires an enormous amount of energy to produce, the amount of energy saved would be enough to power 2,300 domestic hot-water heaters for a year. |
Urbanism
If the Pentagon were totally powered by renewable resources for one year, it would free enough existing energy to run all of the urban mass transit systems in the United States for almost 14 years. |
Source: National Building Museum,
"Big & Green: Toward Sustainable Architecture in the 21st Century"
For more information:
The New and Improved City
What is happening to the city? It's still there, according to numerous surveys
and reports, still viable and, in some cases, still economically healthy. But recent trends indicate that the shape of cities as we know them may be changing, spawning "subcities" that offer the best of the city environment on a 24-hour basis.
According to Emerging Trends in Real Estate 2003, many metro areas are showing declines in development and investment opportunities as well as marked increases in vacant space. Buildable land is scarce; more companies are downsizing than upsizing; and the question of "shadow space" lingers. While there are signs of recovery, the road is still a bumpy one. But some of these cities — Atlanta, Greater Los Angeles and Washington, DC, in particular — have given rise to subcities that are not necessarily within the larger metro area but are thriving on their own attributes. What does this mean? Think investment opportunity.
For the past few years, the Emerging Trends reports have noted the strength of subcities, based on responses to surveys conducted for the report. In the most recent report, Emerging Trends notes, "No question, developers would love to build more in the 24-hour cities too. But site scarcity, geographical boundaries (lakes, rivers, oceans and mountains) and more zoning/environmental impediments severely restrict their production. The result, over time, is healthier markets
with better investment performance."
Sub, But Strong
Buckhead and Midtown (Atlanta)
Bethesda, MD and Reston, VA (Washington, DC)
Walnut Creek, CA (San Francisco)
Birmingham, MI (Detroit) |
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What Lies Ahead: Office and Industrial Projects 2003 - 2008
The Industry Trends Task Force — the NAIOP Think Tank — meets three times a year to examine the challenges and opportunities that future trends will present to the industry. At their February 2003 meeting in Washington, DC, here's what they saw on the horizon and how it might affect office and industrial projects, 2003 - 2008.
Demographics
- Boomers are aging, but will decide to work longer and put off retirement.
- Because of their reduced 401K's, all investors are becoming more risk averse.
- The real estate industry is graying, and faces stiff competition for recruits from other industries.
- Cities that are perceived as having a lower quality of life will experience a brain drain, especially of young, educated professionals.
- There is a need for the industry to seriously embrace diversity, as seen in the "majority minority" states like California, Texas and Florida
Changing Nature of Business
- Industries built on intellectual capital means that the office is between the ears.
- Telecommuting, home offices and hoteling of office space are having a real impact, and reducing need for new space - will it stay flat for the foreseeable future? Will demand ever really return? (This is not a rhetorical question.)
- Manufacturing in the U.S. used to be 50% of the GNP; now down to 20% and some predict it will fall even further - to 10%.
- China will retain its global dominance as the producer of products; they will make the products — U.S. and Canada will store them prior to distribution, so the need for industrial will remain.
- There was some ominous discussion of impending deflation and the weakening of the dollar. As has happened in Japan, this is an extremely damaging situation that is difficult to reverse.
Legislation
- Legislative trends that are big on the West Coast will make their way East, e.g., green development.
- Smart growth is being disguised in many ways, e.g., as water restrictions.
- "Snob zoning" - for example, the low density mandate that is taking place in Loudoun County, VA — discriminates against immigrants and makes affordable housing impossible. Will it force gentrification of close-in locations?
- Public institutions are driving development, but without a place for developers at the table. For example, in Toronto, an Arts Board hired a celebrity architect to design a project. They are using the plans to raise money directly. The developer is missing at the table.
The Need to Differentiate Your Product
- The "commoditization" of real estate is a real danger. We need to avoid being forced into a situation where we compete on price alone.
- Developers are differentiating their company through niche development, e.g., biotech development.
- Also, Green Development is coming on strong, especially on the West Coast.
- In bad times, companies used to "move up the food chain" to better space. But in today's business environment, they will only move up if the building offers tangible benefits, and they can use the building as part of their recruitment tools. Marble is not enough.
First Look:
By Sheila Vertino, NAIOP's vice president for information and research, and Anne Simpson Prior, NAIOP's manager of information services. |
