Friday, August 19, 2011

CalPERS; organizing your email; concert stage collapse

CalPERS has often been looked at as one of the leaders that many other pension funds follow.  just this past week they announced plans to launch a new emerging manager program.  in a world that likes labels, the definition of 'emerging manager' has been somewhat of a moving target but the CalPERs definition is one that i personally subscribe to:  "managers with (a) less than $1Bn of assets under management and (b) no more than three prior commingled funds or separate account investment vehicles."  like with anything, there will be objection to this definition from some managers who think of themselves as still emerging. as stated in the public record of the recent investment committee meeting, the proposed five-year program will not exceed $200MM and will focus on investment in managers and assets located in urban California markets.  CalPERS retained Crosswater Realty Advisors (aka ted leary and his posse) to present a report to the investment committee on this subject.  while a number of public pension funds already have an emerging manager program in place, it'll be interesting to see if others follow.

i apologize for overloading your inbox with three OTRs this week.  without boring you, after two weeks of failing to deliver OTR to you, i finally found out what the problem was (i hope).

update on my new email management system.  a few months ago i wrote you about a new way to manage emails that i read about.  i decided to implement it immediately.  i'm here to tell you that it is working for me.  simply, it's the same idea that was suggested years ago when all we had was paper.  when something lands on your desk or in your in box, do one of three things with it:  act on it, delegate it or toss it.  this email system is similar but with a couple of extra wrinkles.  yes, every day, i do use that system (although i don't have many situations where i can delegate stuff) but i also created email folders with the following labels:  tickler (which i check first thing every day and which contains items that need attention soon); reference (for stuff that i want to 'file' that could be research stuff or things i feel i will be able to use somewhere down the line); waiting for (as it says, for things that i'm waiting for from somebody); future meetings (where i want to remember to schedule a meeting with someone at a future date); someday/maybe (needs no explanation).  i also have labels for each month where i do save a number of emails from that month but then, at the end of each month, i purge those files wondering, "why the heck did i save this one or that one?"  anyway, it's working for me although we all have different ways of keeping our lives organized and, it's whatever works for you that counts, right?

as the media tends to behave, when one disaster, natural or otherwise happens, they scour the world looking for other things that resemble the first disaster.  but, i can't let this week pass without mentioning the horrible stage collapse at the music venue in indiana.  watching the one video on you-tube which captured the horrific scene brought tears to my eyes and chills to my body.  i haven't read anything in the past couple of days but as you would expect, there is finger pointing and stuff that comes along with it, looking to place blame.  and, just from going by what has been reported, some are suggesting that there were advance warnings of very high winds approaching.  should they have been heeded immediately?  were they even communicated to the stage manager and audience?

looking at the size and elaborateness of the stage/sound/lighting and everything that goes along with producing a big, live music event, i was thinking about how it's all grown, so big, from the good old days when the beatles played shea stadium in ny with their vox amplifiers and simple stage arrangement (of course, no one could hear them due to all the screaming!).  and, as ticket prices for live shows have soared, promoters and the bands themselves have escalated the elaborateness of the delivery (i saw the stones in germany a few years ago when their stage recreated an ocean liner and U2 and bon jovi and pink floyd which also had huge set ups).  this tragedy won't change things but i think that given the great advances of technology, especially in sound engineering, music can be delivered to certain size crowds with less gigantic structures (although a lot of what's on those structures is lighting related).  i remember when MTV first launched.  my reaction was, "this is music, it's an audio sensory thing, not a visual sensory thing." of course, history has shown that that has all changed.  but in my simple way of looking at things, it's still all about the music, the sound, the human beings performing rather than the ancillary entertainment that almost serves as a distraction from the music.  but (big sigh), i'm probably exposing the fact that i yearn for some of the simpler things and yet, i know that they will most likely never return.  those killed and hurt in indiana could have (and may actually be) our sons or daughters or our friends who had just gone there to groove on the music.  what happened is just so, so sad but just like lots of things.  it seemed like it was mother nature, once again flexing her muscles, perhaps warning us in some ways that she's concerned about the direction society is moving.  who knows?

who said “size matters”?  there are two published pieces i receive that are in an interesting format (is it a trend?).  they’re about half the size of an 8 ½ x 11 piece of paper and are very cute.  one, called the decisive eye is published by Internos Real Investors and the other called the property perspective is published by Frogmore.  I like the “kindle” size as it makes it easy to take with you.  Nice to see some people thinking differently.

restaurants of the week (first time at both):
1.  fig & olive, several manhattan locations.  i ate at the one on 52nd street between madison and fifth.  thanks zoe.
2.  fresco by scotto, also on 52nd between park and madison.  thanks jerry (my accountant for longer than we both want to admit) who published a periodic blog called, achieve great things!

OTR was listed as #7 in the best real estate/finance blogs in a just published survey in The Institutional Real Estate Letter-North America.  thanks for all your support and encouragement over the years.

 photo:  nj balloon festival, august 2011. thanks jerry

on the road….

aug. 22-26:  new york
aug. 29-sept. 9:  northern california
sept. 12-16:  new york
sept. 20-21: amsterdam to moderate a panel at the PERE Global Forum (flying aeroflot from jfk-moscow-amsterdam).  first time on aeroflot.  Called them numerous times to try to reserve as seat.  They either don't answer or have no one who speaks English!  Should I be concerned?
oct. 4-6:  las vegas to be a panelist at CBRE’s Americas Summit on “The Commercial Real Estate Industry of the Future: A 5-10 Year Outlook.”  (oh no, that crystal ball thing again!) thanks to asieh mansour, CBRE’s head of research americas for inviting me to join ray torto of CBRE and geof dohrmann of IREI in this discussion.
oct. 17-19:  chicago to attend the PREA fall meeting
nov. 2-5: washington, dc to attend the CRE Annual convention
nov. 9-10: new york to moderate a panel at the PERE forum

These are my views and not that of my employer.

Wednesday, August 17, 2011

August 5, 2011

in a harvard business school case, “bono and U2”, professor nancy koehn discusses business lessons to be earned from the famous band.

key concepts include:

·     take stock of how you are using your funds, your authority and your people.
·     a leader’s mission and purpose isn’t static; it evolves.
·     the mission of the ceo should be related to the organizations performance.
·     who you are and what you stand for as an organization have great relevance to the people who buy your product (or service)

“in the bigger picture, U2’s journey reflects our own moment here in the early 21st century.  U2’s appeal has always been about our common humanity and the yearning we all experience to follow a higher path. people are looking for the light and U2’s music has spoken to that since the band started.”

“any ceo who thinks his or her job is primarily about maximizing shareholder value is living in the past.  the game of what kind of capitalism will define this century has changed very quickly and dramatically.  creative capitalism, conscious capitalism, stakeholder capitalism, call it what you will.  the larger social footprint and role of business are here to stay.”

it’s a very interesting piece which i’ll be happy to send you.  and, while it’s written towards ceo’s of companies, when you think about it, we are all our own ceo’s of ourselves and the way we choose to live our lives matters to us, if to nobody else.  we have those choices to make.  i have made it my mission to try to bring the world closer together, one person at a time.  one of the wonderful byproducts of all the travel I’ve done is getting to meet people and understanding them better and hopefully leaving them with a little better understanding of americans.  we're talking about people here, not countries, not religions as we are all the same....human beings.  from the time very early one morning that I talked with a paris policeman who was guarding the palace of the president of france right after we invaded iraq and americans were ‘personna non gratt’ in france and we agreed that we did not hate each other, we just hated what america had done to meeting people in liberia and bringing back the challenges that they face, these experiences have been really meaningful to me.

like many of you, i’ve been planning what industry events to attend this fall and winter.  and as you can see by my schedule below, i’ve made some decisions already.  but it got me thinking:  what are my expectations from attending a conference?  are they met?  exceeded?  what is it that you’re not getting that you’d like to?  after all, attending almost any conference (and some in particular) is expensive and time consuming and when you combine those you’d like to leave a conference feeling that not only was it worth spending your time and money but that you would recommend it to a friend.

if you have some time, i’d really appreciate you sending me your thoughts, perhaps wish list,  when you say, “ I wish there was an event which provided this (whatever this is to you).”  thanks.

thanks to drew genova of cbre in washington, dc who sent me an article called “secrets to better networking.”  the suggestions come from a book called “never make the first offer” by donald dell, founder of the proserv sports agency.

  1. make friends.  create opportunities to get to know people out of the office, out of the normal parameters of the business relationship and outside mutual comfort zones.
  2. make friends of their friends.
  3. find mentors.
  4. give advice (carefully)
  5. don’t keep score.
  6. massage your network. send personal notes.
  7. show no fear.
  8. do good works. charitable endeavors

i’ve built a wonderful network of people which is now global.  this column is read (or at least received J by people all over the world.  i consider it both a privilege and a responsibility and have always treated the people i know with respect and consideration.  my connectivity has never been calculated.  i just love people and love helping people.  i realized, not all that long ago, when I was trying to identify what made a good day for me, it was when i was able to help someone, not necessarily in a big way.  it feels good.  i endorse some of the points that dell makes above but a couple of things i’d add is ‘be yourself’, ‘be natural’, 'don't take people for granted' and 'don't abuse your network.'  

On the road….

aug. 15-26:  new york
sept. 12-16:  new york
sept. 20-21: amsterdam to moderate a panel at the PERE Global Forum
oct. 4-6:  las vegas to be a panelist at CBRE’s Americas Summit on “The Commercial Real Estate Industry of the Future: A 5-10 Year Outlook.”  (Oh no, that crystal ball thing again!) Thanks to asieh mansour, CBRE’s head of research Americas for inviting me to join ray torto of CBRE and geof dohrmann of IREI in this discussion.
oct. 17-19:  chicago to attend the PREA fall meeting
nov. 2-5: washington, dc to attend the CRE Annual convention
nov. 9-10: new york to moderate a panel at the PERE forum

these are my views and not that of my employer.

August 12, 2011

this morning, for the first time in a long, long time, i sat down to write this little story to you, stared at the blank page, and wondered what i could write that would be of interest to you.

i’m not qualified to write about the craziness of the stock market (although my opinion is that, just like so many things, over-reaction is rampant in the world).

as you know, with an occasional slip-up, i’ve stayed away from politics (also not qualified to comment).

and, as many of my european real estate industry friends are off on ‘real’ holidays (i.e. at least two weeks during the summer and when you get a ‘gone fishing’ email reply, saying they will not be checking email, you know they mean it.

but, the commercial real estate business chugs along, just like the little engine that could, working it’s way up a steep hill and trying to find itself again.

RCA published a release this week on the subject of Development Land deals.

Sales of developable land increased by 64% year-over-year in H1'11 to $3.2 billion. Though that's still below growth for other property sectors, increasing volume in this sector indicates some loosening of what has seemed a near moratorium on development.
As in the broader market, investors have focused on multifamily and CBD sites in primary markets. Prices for land have fallen farther than for all other property types, and lenders are still achieving lower recovery rates on average for land than in other sectors. Nonetheless, well-located land has achieved close to peak-era pricing as well as recovery rates that are closer to the average rates for other property types.

to me, this is not unexpected.  developers have always been the real risk takers in our industry.  through exhaustive market research (sometimes) they determine that a piece of property has potential.  when they’re right, it’s a big win.  when they’re wrong, well, it’s a problem.  real estate has always been a game of deep pockets, deep enough to ride out the storms that affect absorption of houses, apartments, office, retail and industrial space, what have you.  and with a renewed optimism about things, it’s not surprising that development sites are hot again. and, if you were trained, like i was, that the upside is made on the buy, prices like these are probably very tempting.  who is lending money for development sites i’m not sure about but there are more pockets of money these days than the traditional sources, deep or otherwise, which have a higher threshold of risk (although there will come a day of reckoning when they’ll have to face their investors…either with a check, a bill or the news that they had to give the property back).

there is one thing that i would like to share with you today:  in the summer of 2008, when i was thinking about the next step in my career, i read a bunch and summarized of books.  these days i've been thinking about me waking up one day, just after my 106th birthday, and feeling, ‘i shoulda done this or i shoulda done that or i shoulda…..’ i’m sure some of you know those feelings.  so here are a few things from some of the stuff i've read (and in some cases been re-reading) that have struck me this week:

it’s human nature for people to take precisely as much interest in you as they believe you’re taking in them.  there is no stronger way to build relationships than taking a genuine interest in other human beings and allowing them to share their stories.
everyone should start at ground zero.  they should ask, ‘is this viable anymore?  is this what the world wants?”
having a vision is not enough; if you fail to envision the potential of your creation, it will be left for others to exploit.  what you need is a vision and the ability to develop a strategy to achieve it.
“if a man has a talent and cannot use it, he has failed.”  thomas wolfe
“what you can do or think you can do, begin it.  for boldness has magic, power and genius in it.” goethe
"if you let them, things just happen in the right way, at the right time.  at least they do when you let them, when you work with circumstances instead of saying, “this isn’t supposed to be happening this way, “ and trying hard to make it happen some other way.  if you’re in tune with The Way Things Work, then they work the way they need to, no matter what you may think about it at the time.  later on, you can look back and say, “oh, now I understand.  that had to happen so those could happen and those had to happen in order for this to happen….”  then you realize that even if you’d tried to make it all turn out perfectly, you couldn’t have done better and if you’d really tried, you would have made a mess of the whole thing.” the tao of pooh
here are the tour dates for a good friend (and the guitarist in my ‘band’) ernie hendrickson.  if he is coming to a place near you i encourage you to check him out.  i also guarantee that you will enjoy it.  ernie is the real deal!

Friday, August 26th
Cafe Carpe
Ft. Atkinson, WI
Saturday, August 20th
Kinsman, IL
Thursday, September 1st
The Lemon Grove Cafe
Youngstown, OH
Friday, September 2nd
South Park Tavern
Dayton, OH
Thursday, September 8th
Tiger Room at Calhoun Street Spirits
Fort Wayne, IN
Saturday, September 10th
The Living Room
New York, NY
Sunday, September 11th
Felicia's Atomic Lounge
Ithaca, NY
Monday, September 12th
Bullfrog Brewery
Williamsport, PA
Friday, September 23rd
Six Strings Club
Bloomington, IL
Friday, September 30th
Redstone Room
Davenport, IA
Saturday, October 1st
Shullsburg, WI
Saturday, October 1st
The Wheel Inn
Shullsburg, WI
Thursday, October 20th
Anderson Fair
Houston, TX
Friday, October 21
The Bugle Boy
La Grange , TX

Congratulations to my friend Lynn Kehoe who joined another friend, Ed Schwartz at ORG Real Property as a consultant and a member of the investment committee.

on the road….
aug 11-aug. 14:  northern california
aug. 15-19:  new york
aug. 22-sept. 9:  northern california
sept. 12-16:  new york
sept. 20-21: amsterdam to moderate a panel at the PERE Global Forum
oct. 4-6:  las vegas to be a panelist at CBRE’s Americas Summit on “The Commercial Real Estate Industry of the Future: A 5-10 Year Outlook.”  (Oh no, that crystal ball thing again!) Thanks to asieh mansour, CBRE’s head of research Americas for inviting me to join ray torto of CBRE and geof dohrmann of IREI in this discussion.
oct. 17-19:  chicago to attend the PREA fall meeting
nov. 2-5: washington, dc to attend the CRE Annual convention
nov. 9-10: new york to moderate a panel at the PERE forum

These are my views and not that of my employer.

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