NAIOP has created an environment where I can meet the best and the brightest in the industry — people who are making deals and shaping commercial real estate in big ways. This has been a main driver of my membership during the past 33 years. I’m excited to lead the organization in 2020, which I expect will be another strong year for our industry. To help others get to know me, Development magazine asked me to share some thoughts on our industry and association.
What are your goals as chairman?
We’re all stronger when we all operate together. As chairman, I plan to provide strategic leadership to our chapter and volunteer leaders, encouraging them to use the systems and tremendous resources we have in place. The knowledge shared through NAIOP’s conferences, magazine and research can help our members stay informed and ahead of the curve. I’d also like to focus on deepening engagement between CEOs and Developing Leaders (DLs) through mentoring and encouraging DLs to share their views, ideas and challenges. Finally, it’s important for our association to be cohesive and strong across North America, and I look forward to working with our Canadian chapters and launching a new chapter in Ottawa this year.
How has your National Forums membership shaped your career?
I joined the National Forums 23 years ago, and consider it one of the most important benefits of my NAIOP experience. Although we only meet in person a couple of times annually, we collaborate on issues, ideas and challenges throughout the year. We’ve established a high level of trust in our group, which serves almost as an external advisory board for each member, both personally and professionally. The relationships I’ve built have been important to our business throughout the years, and I always look forward to our time together where we share best practices, ideas and friendships.
During your years in commercial real estate, you’ve seen the industry soar sky-high and then bottom out, only to climb again. Where do you view us in that cycle?
The U.S. is now 11 years into an economic expansion, the longest on record. It has also been one of the slowest-growing and more measured expansions I have experienced. The 2007-2009 recession severely impacted industries and companies, but it also created stronger fiscal awareness, controls and balance sheets, and it moderated riskier business practices. These characteristics have helped keep the current expansion at a more balanced pace. Although not its longest expansion on record, Canada has had an equally long growth run since 2009.
Inventory growth in many real estate asset classes during the 2010-2020 period has been slower and more disciplined than in the previous cycle. Leasing markets today are generally in equilibrium, and indicators suggest further economic expansion and therefore space demand across most asset classes. Consumer spending remains strong, supported by the long expansion, stock market gains and lower interest rates. Additionally, downward pressure on prices for many consumer goods has supported retail sales and expansion for industrial logistics space. Long-term interest rates have declined; however, rates are expected to remain low over the short to midterm, which supports further economic growth as well as stable asset valuations or even downward pressure on cap rates.
This said, there are some signs that this cycle is reaching a peak. Uncertainty has been growing in the business and financial communities owing to the length of this cycle, geopolitical concerns and other indicators.
Slower GDP and employment growth are likely ahead and may continue for some time, or evolve into a mild recession. Economists have mixed views on this. However, it does appear that any recession in the next 24 months would likely be short and shallow — and impacts on the commercial and industrial real estate industries should be limited. North American property markets are healthy. Occupancy levels are above long-term averages with demand expected to remain solid even if net absorption slows in the coming quarters. Rent growth should continue in most markets.
All in all, I look forward to a solid year in 2020.
Larry Lance, Executive Vice President, Everwest Real Estate Partners
2020 NAIOP Chairman
Associates degree in Applied Science, Lorain County (Ohio) Community College
Last book read:
“Halftime: Moving from Success to Significance” by Bob Buford
Favorite out-of-the-office activity:
Skiing, biking or hiking — anything outdoors
Daniel Galbreath, former chairman of The Galbreath Company, and Gary Rickel, vice president with CBRE
Best words of wisdom you ever received?
“Tell the truth and do what you said you would do.”
See Larry Lance talk about NAIOP and his vision as chairman: www.naiop.org/larrylance