Friday, April 16, 2010

Did you ever wonder?

Did you ever wonder? If you're doing the right thing? Is the job you're in right for you? Should you be doing something else? Where is the best use of your skills? Your talent? Your passion? Are you in a job because you have obligations ( I was for years)? Are you doing something because it pays you enough to support your habits and those that your family has gotten used to? Did you ever wonder? What would it be like to do something different? Something special? Something meaningful? Did you ever wonder how future generations will remember you? Will they remember you? Will they speak about you? What will they say? Did you ever wonder? Thinking about your life is not easy. It's something we all probably push aside because it's, well, too close to home. But did you ever wonder what is the meaning of your life? Or are you afraid to think about it? Don't be afraid to admit it because I think that most of us are afraid to think of such 'big' things in our lives. And maybe, from time to time, like when there's a tragedy like a friend dying young, or when my Dad died, or when the Polish group died in a terrible and seemingly avoidable plane crash last week, is when these thoughts resurface-when I realize that you just never know, we just don't know.

This week, thanks to the kind invitation from UBS to attend their annual investor conference in Dallas, I had another opportunity to be a detached observer of the business of institutional real estate management. One thing that struck me is that once you prove to investors that you are a prudent and trustworthy guardian of their money, they will continue to trust you. With all the talk about the problems that have occurred in our industry, it is perfectly clear to me that if we stick with the basic rules of engagement in any client/service provider relationship, we can weather any storm. To me, those include the idea of 'no surprises' and communicating regularly, whether the news be good or bad and particularly when the news is bad. I think that too often, we may forget to put ourselves in the shoes of our client and remember what they deal with in their daily jobs. And that too is one of the basics of being a successful service provider.

I've been fortunate to have seen some pretty impressive buildings including a trip to Dubai a few years back. But this week, I was awed during a visit to the Dallas Cowboy's football stadium. Statistically the stadium is the largest domed stadium in the world, has the world's largest column-free interior and the largest high definition video screen. The stadium cost $1.4Bn, has 800 concession stands, 3,000 Sony flat screen TV's and 1,600 toilets. But those are just numbers. It's not possible to describe this structure in words and even photos don't convey the enormity of the space. I'm not a football fan although my brother, Jay, adopted the Cowboys as his first team many years ago (must've been those cheerleaders!). And, while this is a monument to excess, from a structural awe standpoint you may want to take a tour if you're in the area.

On what may be the other end of the spectrum, we also got to spend time in the Dallas Arboretum which is truly a beautiful and serene property. Spring allergy symptoms aside, it's also a wonderful place to spend some 'get-away' time when you're in Dallas.

Someone who reads this column wrote me last week and said, "Can you please tell me exactly what you do?" I thought it was a fair question and here's the answer: When I first started publishing this column I was working for Institutional Real Estate, Inc (the publishers of The Institutional Real Estate Letter and producer of several industry conferences). When I left IREI in the summer of 2008 I started publishing the same column but through this site (Interestingly, not a week goes by when someone-actually this week there were a number of folks-come up to me and tell me they used to enjoy getting my weekly column and I tell them I've been publishing it all along and steer them to this site-so from a shameless self-promotional standpoint-if you know anyone who you think might be interested in this please pass it along). In the fall of 2008 I joined Aviva Investors North America as Head of Real Estate Client Relations. I'm part of the global real estate multi-manager group that has $6.3 billion in assets under management and my job is to grow that business. 

Interesting tidbit from this week's RCA report on workouts:
While modification and restructuring of existing loans remains the preferred strategy, dispositions have also increased. The growth in sales activity has been well received by investors, many of which are starved for distressed situations. Consequently, lenders have not had to discount pricing further as they ramp up dispositions.  The more than $18 billion of distressed situations resolved or restructured in just the first quarter of this year was equal to the total amount resolved in the first three quarters of 2009.

We're on the precipice of opportunity in the global institutional real estate world.  Some will play it safe; others will 'go contrarian.'  No matter what direction people choose to pursue, and even if their decision is to 'do nothing', there are no guarantees, only educated guesses and that's what makes things exciting right now.  A lot of very smart people are in a way placing bets that the path they choose will be the one that in hindsight will prove to have been the right one.  And, there are more possibilities than ever before.  It's one of those rare times when the opportunity for wealth creation exists and even some of those who were able to create wealth in the early 1990's are wondering what to do.  It's going to be a very, very interesting next few years, don't you think?

Btw:  If you woke up this morning and felt you wanted to go shopping for a loan or an REO asset you may want to check out the Carlton Exchange

On the road....

April 17-21: Vacation in Tuscany
April 22-23: Venice for the INREV annual conference
April 26-30:  New York
May 13-15: North Palm Beach, FL for the annual Homer Hoyt Institute/Hoyt Fellows conference
July 13-16: Laguna Beach to attend the NMS Real Estate Roundtable

Photos:  Dallas Arboretum

These are my views and not that of my employer.

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