Friday, September 10, 2010


First let me apologize for the size of the font on last weeks column.  It was unintentional and I appreciate a few of you letting me know about it. 

Having been a journalist since college I appreciate good journalism and what you can learn from it.  But we’ve all seen how the media’s lack of responsible reporting distorts facts and events.  I’m sure you’ve seen this more than once yourself where you’ve been somewhere personally and when you read or heard what the media reported about it you said to yourself, “That’s not the way it was!”  Which simply is my introduction to why attending important industry conferences is, well, so important.   This week I attended the INREV conference in Amsterdam.  There were 150 people representing 50 institutional investors and 66 fund managers.  In addition to the general sessions there were breakout sessions which put the investors and the managers in their own rooms to discuss things openly.  There were also committee meetings (I’m a long-standing member of INREV’s membership committee) and clearly believe in the benefits of membership to anyone doing business or wanting to do business in the European institutional real estate world (Commercial announcement!). 

But the real benefit of physically being there (and I know to a large degree I’m preaching to the choir here) is the ability to chat informally with people,  perhaps over some type of beverage, about things that you wouldn’t write in an email or maybe even talk about on the phone.  There is the ability to randomly run into someone, that you’ve known before or are just meeting for the first time.  And, this week, there was some unexpected and very positive feedback that I got from an investor about the firm that I work for.  You just can't put a value on that kind of stuff.

So, with this as a lead-in, I’ve typed up some notes and quotes and present a few for you below.  If you’d like all my notes please email me and I’ll send it to you).

Notes and quotes from the INREV conference in Amsterdam this week:

1.   Solvency II will have a dramatic impact on insurance company real estate asset allocation when it’s adopted (2013).
a.  Introduce economic-risk requirements across the EU to incentivize insurers to develop suitable, adapted-risk control tools.
b.  The overriding purpose is risk management and how to protect the solvency of insurance companies (i.e. insuror is considered solvent if it has enough free capital to cover unexpected losses). 
c.  It’s like commercial bank ‘reserve for loan loss requirement’s and as it’s being discussed now, bonds will have a 0% capital set-aside requirement and real estate will have 25%!!!
2.     “The building industry should do something with governments rather than having governments do it to us.” (Sustainable development).
3.     The sustainability discussion in corporate board room seems to center on this:
a.  Have to?
b.  Want to?
c.  Ought to?
4.     “Be careful of the ‘green-only grand gesture’-it’s not necessarily right, economically or environmentally.”
5.     “Investors who moved away from diversification in their real estate portfolios will move back to it.”
6.     “We are looking for managers who have great ideas-we need choice.” (Fund of funds manager)

I had a great time as I saw a lot of industry friends that I’ve gotten to know over the past five or six years starting when I launched Institutional Real Estate’s business in Europe.  As I’ve said before, even on a global scale, our industry is a small world.

The other morning, after turning on the shower, I noticed a tiny spider trying desperately to make it’s way up the side of the tub to get out of harms way.  We live in the country and have more than our fair share of spiders (and especially spider webs) and many times a tiny spider seems expendable.  I don’t know what was different that morning but I reached down with a tissue and saved that little guy and put him down on the floor of the bathroom and watched him, well, scamper would be too poetic of a word, more appropriate if it were a dog, move pretty quickly away from the scene of the crime to safety.  How long he’ll survive is a mystery but that day, I gave him another chance at life.  I’m not bragging about this, just relating what may have crossed my mind in that instant, the moment we have to choose one thing or another (Malcolm Gladwell’s “Blink”).  But what this whole thing is about is our opportunity to change a life.  And it doesn’t have to be something dramatic or extreme; it could just be a ‘random act of kindness.’  It could be as simple as saying to someone who just joined your firm “Let me know if I can be of any help.”  You know what it’s like when you start a new job, right?  It’s like your first day in a new school and you don’t know anyone and they don’t know you.  Was there someone who reached out to you, to break through the fear of the newness?  And if there was, haven’t you appreciated what that person did and remembered him/her for the rest of your life?

On the road....
Sept. 13-17:  San Francisco Bay Area
Sept. 20-21:  New York
Sept. 27-29:  Tysons Corner, VA (NMS Fall Conference)
Oct. 4-7:  The City By The Bay (PREA Conference)
Oct. 12-15:  City of Magnificant Distances (ULI Fall Conference)
Sept. 30:  The City That Works
Oct. 1:  A Great Place on a Great Lake.
Oct. 26-27:   The City So Nice, They Named It Twice (PERE New York Forum) 
Nov. 5:  The City of the Big Shoulders

A beautiful walk between the Amsterdam Hilton and the INREV office

Restaurant of the week:  Roberto's, inside the Amsterdam Hilton.  I was so tired last night that I just went downstairs in my hotel to their restaurant not knowing what to expect.  I had one of the best, truly, meals ever with service that was on a par with almost anywhere I've even been (and if you ask most Dutch they will admit that their country is not well-known for customer service).  

These are my views and not that of my employer.

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