UNC Case Competition

I had a great experience today, serving as a judge in the University of North Carolina (Kenan-Flagler School of Business) MBA Real Estate Challenge. The development case was really complex and all of the 16 schools that participated did a remarkable amount of analysis, preparation and presentation in a short time. The winner, in very tight voting was, North Carolina. The runner-up was UCLA. Tied for third place were Columbia and Dartmouth. After the presentation and getting a chance to chat with a number of these students in a more relaxed environment after the challenge, believe me, there is hope for the future of the commercial real estate industry! In the library of the Carolina Club at the University of North Carolina I found a shelf of books called “The Yackkety Yack” which was the college annual (yearbook as it were). I pulled out the very first issue for the first ever graduating class of 1901 and found a couple of interesting things: 1. This from the preface: “It has passed into a proverb that success is reached through failure-repeated failure has come to all. We have made many mistakes. Man, at best, only moves towards what is perfect, and the goal is reached through the lessons taught by repeated mistakes.” 2. These may be the best. Copy from two ads: a. Abbot & Stephens Real Estate & Investments Charlotte, NC “From 20-100% made on real estate investments through this agency. Money will always bring sure and quick returns when judiciously paced in this line of investment.” b. Bank of Chapel Hill: “A word to the wise is sufficient. Don’t run a risk by keeping your money in your room or pocket. We solicit student deposits.” Given that I’m thinking seriously of starting to keep my money in my room I’m not so sure about this one but the real estate above is a classic! Some quotes from the presentations at the real estate conference yesterday: 1. Every thorn has its’ rose 2. Underwriting is back and if you’re a user of capital it’s a real bummer. 3. I never saw a developer who saw an escrow he liked. 4. What deals are getting done today (worst to best): Hospitality, retail (grocery anchored shopping centers), office/industrial, multi-family. 5. In 2008 only two asset classes did well: Treasuries and Wal-Mart. 6. 65% LTV is looking like the new ‘full loan.’ 7. Multi-family is the only asset class that has even a shred of normality. 8. Ideas for the future of CMBS: a. Let the originator hold the B piece b. Of every 10 loans originated, one loan, randomly, must stay on the originators books 9. Buy paper, not property 10. If you’re offered a destination or resort hotel in a city whose name you cannot pronounce-pass on it. 11. We expect this to be one of the best distressed environments ever. 12. Capital will be weighted towards opportunistic strategies. The With 4Q08 valuations starting to flow into the hands of institutional investors in real estate, the impact is yet to be seen. And, in an article on the New York office market this week by real estate journalist Terri Pristin in the NYTimes, when several industry experts were questioned, Bob White of RCA (Real Capital Analytics) was the only one to be brave enough to give what I and many others feel is the real answer. “The true answer about where prices are right now is, ‘I don’t know.” And, my friends, I believe that is the answer to most questions about where our economy is and where it’s going and maybe more importantly, when. Except from a letter to the editor in the NY times last Sunday talking about a book that had been banned in the Miami Dade (Florida) school system: “When I was a sophomore in high school, my history teacher assigned "Masters of Deceit," by J. Edgar Hoover. My father, ever engaged in his children's education, skimmed the book and thought it a nasty piece of anti-Communist propaganda. No friend of Communism, my father — a Holocaust survivor — had left Poland in 1945 to escape the Soviets. He directed me to read an additional book, "The Communist Manifesto." I knew very little of Karl Marx or his book. When I asked why I should read it, he told me I couldn't possibly understand the Hoover book unless I knew what he was writing against. After I had finished both books, my father and I had a long conversation about both, in which he helped me to refine my understanding of the books, of the world, of politics and of what it takes to be truly educated. I recall very little of those books, 40 years later. What I do remember is a father who cared deeply that I learn to think for myself, and his lifelong lesson that the best way to combat bad or insidious information is with more information, with careful thought and with exposure to the broadest possible array of ideas. Too bad he didn't have a chance to talk to that father in Miami." First. Can you believe that we’re still, in 2009, seeing the banning of books in the United States? Second, I believe that the two most powerful things that a parent can instill in a child is a feeling of self-esteem and the ability to think for themselves. Where I'll be: Feb. 22-29: Vacation in Mexico….totally offline! Mar. 2-5: New York Mar. 6-9: Montreal Mar. 10-13: Cannes to attend MIPIM, host the second annual MIPIM Summit TV show (March 12-Invitation Only) and attend the INREV seminar and moderate a session with Finnish investors. Mar. 16-19: Philadelphia Mar.24: New York to moderate a panel at the iGlobal Forum Real Estate Private Equity Summit Mar. 25-26: Washington DC to attend PREA's Spring Conference April 23-25: Athens, Greece (not Georgia) for INREV’s Annual General Meeting and Conference These are my personal views and not that of my employer.

Walking through Central Park

(Left-Momentary sunrise on Central Park West apartment building this morning). (Right-Valentines Day window in shop on Fifth Avenue). Walking through Central Park in New York in the morning on the way to the office I noticed something for the first time this week. I heard what first sounded like a church bell ringing but looked up and saw the Delacorte Clock, which I had never noticed before. This from the web: One of the most beloved monuments in the parks of New York City, this musical clock hovers above the arcade between the Wildlife Center and the Children's Zoo. A gift of publisher and philanthropist George T. Delacorte (1894–1991), it was dedicated in 1965. Delacorte conceived of the clock as a modern version of belfries in churches and city halls dating back to the Middle Ages. Italian sculptor Andrea Spadini (1912–1983) crafted the whimsical bronze sculptures, which depict a penguin, kangaroo, bear, elephant, goat, and hippo parading with a variety of musical instruments as well as two monkeys with mallets that strike the bell. Each day between eight in the morning and six in the evening, the clock--now digitally programmed--plays one of thirty-two nursery rhyme tunes on the hour. On the half-hour, the mechanical performance is a bit shorter. Just one of those great things that happen when you least expect them. And all of this just next to the sea lions who crane their necks to the sky (who knows why?) seeming to thrive in the windy morning while sprawled in what looks like the most uncomfortable positions on rocks totally oblivious to the fact that 49 people the night before in an airplane crash in Buffalo and those unknowing folks never again having a chance to experience things like this or a kiss from a loved one on Valentines Day or watching their children grow up or simply enjoying the breeze of an early spring morning. Maybe we all do just have a certain amount of time on earth and if so the worst part is that we don't know how long. Here’s an excerpt from a column on Innovation and Marketing written by my friend Gunnar Branson. Gunnar has had his finger on the pulse of marketing, branding, innovation in the commercial/institutional real estate industry for many years. I met him when he was building GE Real Estate into a globally recognized brand. I think this is particularly poignant today: There are many reasons for a recession to happen, but whenever an economy is in one, the rules for success change dramatically. Capital becomes scarce, raw materials unreliable, customers reluctant to buy. What was easy before suddenly becomes more complicated. Products that everyone had to have at any price before, suddenly lose their value. But as long as there are still people living their lives, there are ways to create something they need, want and will pay for - it just might be a little different than it was before. Companies that perceive and understand the new rules in a recession are able to innovate and thrive, while those that continue as they did before risk losing everything. Most people's natural inclination is to continue doing what they did before - even when it doesn't work as well as it used to. Innovators change what they are doing, how they are doing it and even why they are doing it in order to succeed in a new environment. Strangely then, the most dangerous strategy is to avoid innovation during a downturn. It's times like these that the imperative for every company, every leader, every manager must be to challenge all assumptions based on a rising market. Every process, every service, every product must be looked at from a fresh perspective - and changed to fit the new reality of a down market. I was speaking with someone early in the week who explained to me the difference between being laid off, or made redundant and being fired that I guess I didn't give much thought to when I wrote to you last week. It seems like the difference is that when you're fired it means that you were let go for cause so I guess what we're seeing so much of is not firings but layoffs. Either way too many people, in all walks of life, are losing jobs and in some cases, based on their expertise, i.e. a lawyer, can't find other work. And although people have generally not felt sorry for lawyers, this is far from over. MIPIM/Cannes Heads-up: Beware that a company called “The Ultimate Living Group-Trade Show Specialists” are crooks. I have it on very good authority and wanted to pass it along to you. Last Sunday I heard what might have been the most awesome church pipe organ I’ve heard thus far. It was at the church of St. John the Divine in Manhattan and it was wonderful. For a long time I’ve had a passion to hear pipe organs and whenever I’ve been away from home on a Sunday I’ve found a church or cathedral in whatever city I was in. I’m not religious although I consider myself spiritual but I’m willing to sit through any kind of service to hear a good organ and this one is breathtaking. This Sunday I'll be going to St. Marys, a hidden gem on 46th Street between Sixth & B'way. Prediction: Starbucks… I predict that by 2013, they will either be out of business or will have switched to a franchise model (there are going to be a lot of unemployed folks starting up franchise businesses and there are only so many “Sir Speedy” that any one town can accommodate)! Finally, Ward Feste with Carlyle Search in Chicago sent me an article and I want to share the following section with you:

I don’t know what the hell is going to happen. I have been in this industry for 30 years and haven’t seen anything quite like this—but then I hadn’t seen anything quite like 1973/74 when the stock market lost 50% of its value, or 1979 when the American economy was on the verge of collapse, or the recession in 1982 when more people were in unemployment lines than at any time since the Depression, or when the Dow tumbled 508 points on October 19, 1987—off a record high of 2,722.24—and on and on. The biggest difference between this and other financial meltdowns is the 24-hours-a-day news coverage that feeds off events like a bevy of hungry vampires. I do know the economy will find equilibrium. In the meantime, there are some actions you should take: first, become a messenger of optimism and explain that while economic slowdowns are a part of life, smarter investors will look to the future.

But you also need to take care of yourself:

• Remember how great it is to be alive. • Exercise, eat right, and get enough sleep. • Have a sense of purpose. • Protect your confidence. • Communicate regularly with clients and friends. • Create an environment empowering you and your staff. • Take free days and vacations. • Finally, understand and live by the Law of Requisite Variability, which states that the more flexible a person in any group is, the higher the chances are that person will dominate or become a leader in that group.

You can be that person. Have hope and a plan.

Happy Valentines' Day Honey!

Where I'll be:

Feb.16: New York Feb. 17: Atlanta, GA Feb. 18-20: Chapel Hill, NC to attend the Kennan-Flagler Center for Real Estate Development’s Annual Conference and Real Estate Challenge Case Competition (and to see the North Carolina v. North Carolina State basketball game!). Feb. 22-29: Vacation in Mexico….totally offline! Mar. 2-5: Chicago Mar. 6: Montreal Mar. 10-13: Cannes to attend MIPIM, host the second annual MIPIM Summit TV show (March 12-Invitation Only) and attend the INREV seminar and moderate a session with Finnish investors. Mar. 20-23: Montreal Mar.24: New York to moderate a panel at the iGlobal Forum Real Estate Private Equity Summit Mar. 25-26: Washington DC to attend PREA's Spring Conference April 1: Champaign-Urbana, IL to attend my son’s DMA (Doctor of Musical Arts) recital. April 3-6: Montreal April 11: New York, Nokia Theatre, to see Umphrey's McGee tour in support of their new album, Mantis. A monumental work! (t) April 23-25: Athens, Greece (not Georgia) for INREV’s Annual General Meeting and Conference April 26-20: Chicago to record my next CD These are my personal views and not that of my employer.

On the Road

This is a little longer than usual but there’s a lot going on these days.

During the RTC days, Texas was ahead of the crowd in failed S&L’s and bankrupt real estate developers. As things worked themselves through, those in Texas came back with both humility and with pride that they survived. In reading the financial news today I wonder if this time won’t be similar in at least that way. So many companies reporting huge losses. So many people losing their jobs. So much due to greed. But what's going on is much bigger than the real estate industry and much wider than just the U.S. I wonder if those who were at the helm of companies that went under or were fired from top jobs because of this that or the other thing will be able to wear that “Badge of Courage” in the same way the real estate survivors of the early 90’s did. However, when it comes to humility, well I'm just not sure.

Thanks to the kind invitation of Scott Perkins and Bill Hanson of NAI Hanson in Hackensack, NJ I attended NAI’s Global Outlook Briefing yesterday in New York. The ubiquitous Dr. Peter Linneman, now NAI’s Global Chief Economist, gave the keynote. Here are some tidbits:
1. At the end of the day it’s all about the economy.
2. Why in 2005 did I project that there would be a recession in 2009? Because if you look historically we were believing our own bullshit.
3. Economists, who are mainly university professors believe that ‘if it starts to feel bad, it must be a recession.”
4. When you fly six hours from coast to coast there are people down there who make up the economy-not everything happens on in NY, LA or SF.
5. “The world is coming to end unless we save it this weekend.” When Hank Paulson said that, New York wasn’t in shock because it’s used to hearing bullshit from Wall Street.
6. It was a bi-partisan idiot effort.
7. 2.5-3.0 million jobs have been lost already; 500,000 still to come.
8. We ran the country as if it were a deal shop-it’s okay if you’re a Goldman Sachs but it’s not okay if you’re a government.

Wardrobe note: With wind-chill at minus 8 degrees in New York yesterday I noticed that a lot of New Yorkers made the mistake of thinking that ear buds act as earmuffs. Not!

Murray Shor, veteran shopping center industry publisher and raconteur said this in his blog last week: “We all know that the dismal holiday season, with a substantial drop in shopper traffic, retail sales and overall consumer buying—despite steep discounting--is forecasting major retail bankruptcies and store vacancies within the next few weeks; mavens involved in market research are predicting 200,000 store closings this year.” Wow. There’ll be a lot of room for go-carting in shopping center parking lots. My father took my brother and I to the E.J. Korvette’s lot in West Orange, NJ to go-cart on Sundays (when stores in NJ used to be closed).

Said by a private equity exec at a NYC conference:
"The current state of the private equity industry reminds me of the Warren Zevon song: Bring lawyers, guns and money."

I got a number of emails about my story about my Dad visiting the WWII captured Japanese bomber. I thought you’d enjoy this one sent to me by my long-time college friend “Silent” Kal:
10-12 yrs ago took the family to DC..of course planned to go to the Holocaust museum which opened earlier that year..Got up one morning and took the family over and the line was completely around the block 360 and it was a long block..went to the window and asked how long the wait was …minimum 5 hrs… as I was walking away I remembered my father gave me this card which apparently just identified him as some WWII veteran…but what the hell so I showed it to her as my family rolled their eyes..once she saw it we were escorted in given VIP treatment and treated like royalty..As it turns out my fathers’ battalion was one of the first to liberate the concentration camps and the museum had grainy color home like movies of the event and of course, I thought I recognized him..A special room was dedicated to his battalion…It was quite emotional as well as defining what our freedom really is ..That day is etched indelibly in my mind..It is the only thing I remember vividly about that trip to DC other than the traffic (late at night construction) going to DC moved about 1 mile in 2 hrs 100 degrees..The sacrifices and acts performed by our parents in defense of liberty can only be imagined by later generations..These indeed are trying times but pale in comparison to what was accomplished before us so we can experience the highs and lows of Democracy.

Congratulations to my friend Trevor Gay whose blog on Simplicity has been named one of the top 100 leadership blogs. This site is new to me but it seems like there’s some interesting topics for future reference.

I just finished reading Malcolm Gladwell’s “Outliers.” It’s a good read, which I highly recommend. Here are a few snippets that I highlighted:
• Three things: autonomy, complexity and a connection between effort and reward are, most people agree, the three qualities that work has to have if it is to be satisfying.
• It is not how much money we make that ultimately makes us happy between nine and five. It's whether our work fulfills us.
• Hard work is a prison sentence only if it does not have meaning. Once it does, it becomes the kind of thing that makes you grab your wife around the waist and dance a jig.
• If you work hard enough and assert yourself, and use your mind and imagination, you can shape the world to your desires.

I was talking to a capital raising friend of mine this week who had been fired (sorry, 'let go', 'downsized', 'made redundant' are just baloney words for being fired). He told me that the great thing about our industry is the people. He has received a number of calls from people who were former colleagues and former competitors asking how he was and was there anything they could do to help him. In a world where too many people tell me 'it's sad how few people are willing to take some time to try to help someone else', this is a great thing to hear. It signals some type of positive change in how we're dealing with each other and remember, it's not the end result of what happens when you reach out to someone, it's just that you took the time to reach out.

Always on the cutting edge, France Publications has launched InterFace Conference Group that is headed by a long time industry friend, Rich Kelley. France built this business from the ground up starting with Shopping Center Business magazine into a mega-publisher with 19 titles in real estate, maintenance, construction and operations and wealth management. The combination of Rich, Jerry and Scott France and Randy Shearin should result in some very interesting and worthwhile conferences. All the best you guys.

Cool new hotel: The Nines (as in “Dressing to the nines”) in Portland, OR. Part of Starwood Luxury Hotel Collection. 525 SW Morrison Portland, Oregon

Very cool place of the week: The Tea Zone & Camellia Lounge, 510 NW 11th Avenue, Portland, OR (503) 221 2130 (http://www.teazone.com/index2.html). While I only got to grab a fast, relaxing tea (is that an oxymoron?) it’s a place that I hope to get back to (or open one just like it somewhere!). They have a great selection of teas and tea paraphernalia which they’ll ship anywhere.

Where I'll be:

Feb. 9-16: New York
Feb. 17: Atlanta, GA
Feb. 18: Raleigh, NC
Feb. 19: Chapel Hill, NC to attend the Kennan-Flagler Center for Real Estate Development’s Annual Conference and Real Estate Challenge Case Competition.
Feb. 22-29: Vacation in Mexico….totally offline!
Mar. 6: Montreal
Mar. 10-13: Cannes to attend MIPIM, host the second annual MIPIM Summit TV show (March 12-Invitation Only) and attend the INREV seminar and moderate a session with Finnish investors.
Mar. 16-18: London
Mar.24: New York to moderate a panel at the iGlobal Forum Real Estate Private Equity Summit
Mar. 25-26: Washington DC to attend PREA's Spring Conference
April 1: Champaign-Urbana, IL to attend my son’s DMA (Doctor of Musical Arts) recital.
April 23-25: Athens, Greece (not Georgia) for INREV’s Annual General Meeting and Conference



These are my personal views and not that of my employer.

On the Road

This past week was truly an “On the Road” one. I’ve been traveling with my colleagues Ed Casal and Russ Bates visiting anyone who’ll take a meeting with us (not really but sort of). We went through several climate changes (Chicago, IL; Madison, WI; San Francisco and Sacramento, CA) and it was nice to lose our winter coats in the unseasonably warm CA winter yesterday and today.

Everywhere we went things were slow: restaurant business down, restaurants closing, hotel business down, flights typically full now had space and noticeably less traffic on roads during rush hours. We are in bad times people and they seem to be getting worse. Most folks, even the wealthy are worried and watching their spending and believing and acting more like ‘Cash is King.’

I’m meeting with a broker tomorrow in Napa, CA to see what the market is like to sell my house there. I’ll let you know how it comes out as it may be a good microcosm, at least of that market. But I suspect that in general if you are not forced to sell, don’t. It’s the same thing with institutional LP interests. Until 4Q08 valuations are in we won’t know the full extent of the distress in the LP community in terms of their need to sell their interests. Right now it appears that the same phenomenon that impacted the commercial real estate transaction world (i.e. inability to match expectations of buyers and sellers) will also be a force in the secondary market but we’ll have to wait and see. “Rescue Capital” (as Bret Wilkerson, head of PPR is fond of calling it) is being raised to take advantage of opportunities that are likely to present themselves. Some people will need a life-preserver to save their deals, funds, etc. and but some may need a Coast Guard cutter. Anyway, this type of capital is likely to be very popular. But again, a lot of this stuff is evolving just now and we’ll have to wait a little longer to see exactly how it plays itself out.

My father, who turns 92 on May 1 was the crew chief (for a crew of two) that brought a captured Japanese WWII plane back to the U.S. from the Pacific on a ship and then he and a pilot were given the assignment to fly that plane to Washington, DC. It was supposed to take three days but it took two weeks including a side trip so the pilot could have lunch with his parents, waiting out a hurricane, repairing a faulty oil gauge and my father getting his parachute on when the engine conked out and went into a dive (until they found the lever that opened the auxiliary gas tank). It’s a story that he has told many times and it was definitely one of the signature experiences in his life. I don’t know why I waited this long but a couple of months ago I emailed the Smithsonian, told them the story and asked them if by any chance they knew of the whereabouts of this plane. Shortly I received an email back saying, “We have that plane!” I couldn’t believe it but more than that my Dad really couldn’t. This past Wednesday I met my father and his wife in Washington and took them to a remote Smithsonian warehouse where Al Bachmeier, a 37-year museum veteran took us to see the plane. Although using a wheelchair fairly often now and not too mobile any longer my father climbed up a ladder on three separate occasions to have a closer look into the cockpit where he and the pilot shared this amazing excursion. I have to tell you how small this plane was and thinking of them flying across the country, well, it’s pretty unbelievable. After we confirmed that this was the actual plane and my father provided some color commentary, Al was kind enough to show us around another big building where they restore all kinds of aircraft. He and my Dad talked non-stop about aircraft, engines, etc. Al said that he’s had a number of WWII vets come down and he has learned a lot from their personal recollections. The following day they went to the Steven F. Udvar-Hazy Center Air and Space Museum near Dulles airport. I had been there for a client dinner a few years back and if you are into flight you need to go there.

I guess the reason I’m sharing this with you is that it’s incredible what we are able to do if we just try and believe we can. Taking a wild shot at finding that plane and getting lucky to have a cooperative person on the other end not only reply but forward the email to the right guy…well, it was very special. To be part of my fathers’ experience made me feel really good and I guess now I think about how truly little effort it took me and what ‘priceless’ results it had. All it meant was taking some time to do something for someone else. In a world going madder by the day maybe turning more inside and appreciating what we have instead of being angry about what we don’t have is the key to some peace of mind. Helping others is also healthy. Life is made up of lots of little experiences, some planned, some chance. Grabbing on to them as they present themselves can make all the difference in the world to you and to others.

Where I'll be:

Feb. 2: Portland, OR
Feb. 3-16: New York
Feb. 17: Atlanta, GA
Feb. 18: Raleigh, NC
Feb. 19: Chapel Hill, NC to attend the Kennan-Flagler Center for Real Estate Development’s Annual Conference and Real Estate Challenge Case Competition.
Feb. 22-29: Vacation in Mexico….totally offline!
Mar. 6: Montreal
Mar. 10-13: Cannes to attend MIPIM, host the second annual MIPIM Summit TV show (March 12-Invitation Only) and attend the INREV seminar.
Mar.24: New York to moderate a panel at the IGlobal Forum Real Estate Private Equity Summit
Mar. 25-26: Washington DC to attend PREA's Spring Conference
April 1: Champaign-Urbana, IL to attend my son’s DMA (Doctor of Musical Arts) recital.
April 23-25: Athens, Greece (not Georgia) for INREV’s Annual General Meeting and Conference

Photo: State Capitol Building, Madison, WI


These are my personal views and not that of my employer.

These Days

Walking the streets of New York you might think it’s just a typical January with stores running sales like they do each year. But it’s not. Manhattan looks more like an outlet center than a retailing Mecca. Signs offering 10-80% off and there are few shops that don’t at least have a “Sale” sign in them. The “Anti-Starbucks” movement continues to be evident with more and more Dunkin’ Donuts visible. Taxi drivers who have their finger on the pulse better than most tell me that business is way down. “People are frightened. They don’t know what will happen next; whether they’ll lose their jobs. They are being very, very careful with their money. But, it’s going to get better. The things that President Obama has promised will take time but things will get better.”

With most Wall Street firms getting close to issuing their bonuses another chapter will be closed..we just don’t know the ending yet. It was many years before I learned that investment bankers generally get paid a modest base and ‘bank’ on their bonuses (which as we know from what we read have been humongous over the past so many years). And, as banks continue to show their contempt for both the government bailout money and the public, more and more people are losing their jobs. But, having lost my job several times in my career, there are different ways employers can handle what I believe is the most difficult thing for a manager to do: fire someone. Sadly, I’ve heard too many stories of companies ‘letting people go’ in unconscionable ways-showing no compassion but simply reacting to needing to protect and perhaps increase the bottom line (NOW) by one of only to ways: generate more revenue or cut expenses (and generating revenue is not so easy right now). It’s a shame that our work culture has come to this and while it is understandable from a corporate standpoint it isn’t, to me anyway, from a human standpoint.

America, the land of opportunity, has also become a land where we don’t look out for each other like some other places in the world; countries where there is a respect for the individual, both as a worker and as a person ages. There will be more firings and more bankruptcies (I was involved in making the first Circuit City Superstore deal in Hampton, VA in the mid-80’s and now they’re going out of business, closing more than 500 stores, as will more and more retailers in February). These are difficult times. Oh, btw, have you heard or seen the Hyundai commercial where they say that if you buy a car now and lose your income they’ll take the car back? I know there are probably oodles of legal language in the purchase agreement but even the concept of this is….well, amazing.

Don't forget to vote: The Global PERE Awards is near the deadline. Some of the nominated firms and individuals are neck and neck. Your vote counts! P.S. There's a great feature piece on their website. If you haven't subscribed you can for free.

I offer you the following ‘management tip’ from the blog written my friend in the UK, Trevor Gay, who is a consultant and author on ‘Simplicity.’
“I am often asked to give practical tips that managers can follow to implement Simplicity. It's a brilliant question that challenges me because I guess anyone can say ‘lets simplify things’ but busy managers are looking for practical tips about what they can do personally to simplify the workplace.

Based on my own management experience there are numerous things managers can do and here are 9 for starters.

1. When you have written your next report ask two people who are paid significantly less than you to tell you if they understood it.

2. Make time in your diary every week to ask a customer to tell you in their own words about their recent experience with your company

3. At your team meeting every week or every month depending on the frequency of meetings, ask someone to do a five minute presentation called “My big simplicity idea for our team is …..” (PowerPoint not allowed)

4. Invite a customer to read three e-mails or letters you have sent in the previous week and ask them to give you feedback about the language you used

5. Invite two 16-year old students to attend your team meeting and ask them to give the team members honest feedback at the end of the meeting about the language used

6. Find a report about absolutely anything of two sides of 8.5 x 11 paper. Send the report to a colleague and ask him/her to return it to you reduced to one side of 8.5x11. Judge for yourself whether one side is adequate to get the message across

7 Ask one of your team members to write a story on one side of 8.5x11 about a complicated problem in your department/team. The language must be aimed at an audience of secondary school students (11-16 year olds). Send the story to a local schoolteacher and ask for feedback from the students at his/her school

8. In your next written report of more than 200 words do not use any acronyms

9. Send a report you have written to 2 cleaners and 2 junior Clerical staff. Ask the four of them to rate your report on a scale of 0 to 10.

0=I didn't understand it at all
10=I understood it completely

Think about how you can improve your score in your next report. By the way, if you score 40 points congratulations you are a Simplicity guru."


Happy Birthday Jay and Deb.


Steve

Restaurant of the week: Hill Country BBQ, 30 W. 26th Street, New York. A fun place with live music. Best to go with a group of 6-10.


Where I'll be:

Jan. 26: Chicago, IL
Jan. 27: Madison, WI
Jan. 28: Washington, DC
Jan. 29: San Francisco, CA
Jan. 30: Sacramento, CA
Feb. 2: Portland, OR
Feb. 17: Atlanta, GA
Feb. 18: Raleigh, NC
Feb. 19: Chapel Hill, NC to attend the Kennan-Flagler Center for Real Estate Development’s Annual Conference and Real Estate Challenge Case Competition.
Feb. 22-29: Vacation in Mexico….totally offline!
Mar. 10-13: Cannes to attend MIPIM, host the second annual MIPIM Summit TV show (March 12-Invitation Only) and attend the INREV seminar.
Mar.24: New York to moderate a panel at the IGlobal Forum Real Estate Private Equity Summit
Mar. 25-26: Washington DC to attend PREA's Spring Conference
April 1: Champaign-Urbana, IL to attend my son’s DMA (Doctor of Musical Arts) recital.
April 23-25: Athens, Greece (not Georgia) for INREV’s Annual General Meeting and Conference

Photo: Downtown Cleveland, Ohio


These are my personal views and not that of my employer.

Flight 1549, Violinist in the Metro

<<<<<Who knows where this is?

Sunset from my office>>>>>

The photos of the passengers on the wings of US Airways plane that landed gently on the Hudson River were surreal. Maybe for most who fly, the thought of a water landing is pretty remote-or at least we want to believe that it's remote. But today, those on that plane found out that it can happen and that under certain circumstances everything can turn out fine. It's too soon to really know exactly what happened but what is known is that the veteran pilot coolly and calmly set the craft down and the crew and passengers handled the situation in an orderly way. It's good to see something that could have been a terrible disaster (imagine if this had happened after sundown or if the pilot couldn't control the plane and it hit a building in New York-anything could have happened) ended happily. Tomorrow, when I board the plane for Florida, I wonder if I'll feel any differently.

Well the depression has even hit Dubai so it must be really real. Construction of the world’s tallest tower has been delayed as the developer who is readjusting their plans “to better reflect the current market trends and match supply with demand.” It’s a novel idea, matching supply with demand, don’t you think? It’s something that for a long time drove the real estate industry up until the “Wall of Capital” movie started showing at “A Theatre Near You.”

Private Equity International has just published a 300-page book called “Investing in Infrastructure, which offers detailed analyses from 55 industry professionals who are shaping the global infrastructure fund investment world. It also examines investment techniques & strategies, asset management, legal developments and timely financing know-how. Without wanting to insert a link here the url is (http://www.peimedia.com).

While I have some friends (and one brother) that are attorneys, I couldn’t pass this up. In New York Magazine’s Year-End Double Issue there’s a special section “The New York Area’s Best Lawyers.” It’s an advertising supplement and I want to share some of the lines that come directly from the ads (Note: These are trial, not real estate, lawyers):

1. “We are aggressive with our adversaries, but compassionate with our clients.”
2. “We never back up, we never back down.”
3. “It’s my obligation to do everything I can do get my client their piece of justice.”
4. “The firm’s calling card is its ability to handle high-stakes advocacy.”
5. “When we take clients on, it’s a life and death situation for them. What’s died is their hope for quality of life and we get that back.”
6. “The relief that you can give someone in the courtroom is more than satisfying.”
7. “You pay your fair share, or you go to trial.”
8. “The privilege of representing seriously injured claimants and helping them lead a life of dignity and financial independence is the highest reward a trial lawyer can receive.”
9. “Solving our clients’ legal problems efficiently and with our eye on their business needs is our number one priority.”
10. “I’m proud of the people I represent.”
11. “The best way we can act as truly effective advocates for our clients is to mix a mastery of the medical issues with a passion and empathy for the clients’ plight.”
12. “What we do is a constant reminder to ourselves and our staff of just how privileged we are to live in this society.”
13.
I’ll stop with that one and will not comment, or show you, any of the photos in the ads. They too are something to behold.

I wonder if law schools now teach a advertising/promotion and one-liner course? “Everything is marketing.”


Thanks to a good friend of mine for sharing this with me. I wanted to share it with you.

Violinist in the Metro
A man sat at a metro station in Washington DC and started to play the violin; it was a cold January morning. He played six Bach pieces for about 45 minutes. During that time, since it was rush hour, it was calculated that thousand of people went through the station, most of them on their way to work.
Three minutes went by and a middle-aged man noticed there was musician playing. He slowed his pace and stopped for a few seconds and then hurried up to meet his schedule. A minute later, the violinist received his first dollar tip: a woman threw the money in the till and without stopping continued to walk.
A few minutes later, someone leaned against the wall to listen to him, but the man looked at his watch and started to walk again. Clearly he was late for work. The one who paid the most attention was a 3-year old boy. His mother tagged him along, hurried but the kid stopped to look at the violinist. Finally the mother pushed hard and the child continued to walk turning his head all the time. This action was repeated by several other children. All the parents, without exception, forced them to move on. In the 45 minutes the musician played, only 6 people stopped and stayed for a while. About 20 gave him money but continued to walk their normal pace. He collected $32. When he finished playing and silence took over, no one noticed it. No one applauded, nor was there any recognition. No one knew this but the violinist was Joshua Bell, one of the best musicians in the world. He played one of the most intricate pieces ever written with a violin worth 3.5 million dollars. Two days before his playing in the subway, Joshua Bell sold out at a theater in Boston and the seats average $100. Joshua Bell playing incognito in the metro station was organized by the Washington Post as part of a social experiment about perception, taste and priorities of people. The outlines were: in a commonplace environment at an inappropriate hour: Do we perceive beauty? Do we stop to appreciate it? Do we recognize the talent in an unexpected context? One of the possible conclusions from this experience could be:
If we do not have a moment to stop and listen to one of the best musicians in the world playing the best music ever written, how many other things are we missing?


Steve


Where I'll be:

Jan. 16-18: Ormond Beach, FL for the first Felix Family Annual Birthday Celebration
Jan. 26: Chicago
Jan. 27: Madison, WI
Jan. 28: Washington, DC
Feb. 17: Atlanta, GA
Feb. 18: Raleigh, NC
Feb. 19: Chapel Hill, NC to attend the Kennan-Flagler Center for Real Estate Development’s Annual Conference and Real Estate Challenge Case Competition.
Feb. 22-29: Vacation in Mexico….totally offline!
Mar. 10-13: Cannes to attend MIPIM, host the second annual MIPIM Summit TV show and attend INREV's Annual General Meeting.
Mar.24: New York to moderate a panel at the IGlobal Forum Real Estate Private Equity Summit
Mar. 25-26: Washington DC to attend PREA's Spring Conference
April 1: Champaign-Urbana, IL to attend my son’s DMA (Doctor of Musical Arts) recital.

The End of the Holidays

While I’d like to be known as a man of few words, I don’t think that’s me. But in the Dec/Jan issue of PERE magazine, Executive Editor David Snow’s succinct opening paragraph struck me: “The good news is that investors in private equity real estate are now better equipped than ever to benchmark the performance of their general partners. The bad news is that much of the capital put to work in recent years is going to perform relatively poorly.” From David’s non-practitioner perch he couldn’t be more right and we all know and are going to see more and more proof of this. And while performance and thus returns are and will be down, opportunity in certain sectors may abound. Witness the launch by some veteran real estate guys, Gallin Glick Sullivan O’Keefe, of a consultancy probably born out of opportunity but my guess is to some degree out of boredom. I know Henry Gallin and Mike Glick personally and am reaching out to them today for the first time since seeing the announcement this morning. But as I speak to more and more people, the word “Experience” (not to be confused with grey hair [although as we know while women have similar experience most choose to not let the grey hair show] is more and more important (Disclaimer: This is not a sexist comment; just reality!). I can related to this perfectly as I’ve also been through a number of real estate cycles and a several times in my life made my living on workouts, distressed situations and, to steal a line from my friend Bob Barclay’s firm, North American Realty Advisors, “turning a sow’s ear into a silk purse.” But even for those with experience, and while some issues and conditions resemble past downturns to some degree, this time it’s different. Very!

Working to work this morning I realized that the holiday season is truly over as I watched the now brittle Christmas trees being dragged out to the sidewalks of New York for pickup and, I assume, recycling. But that’s not the only sign. People have come back from their holidays with vengeance. I sense a more than normal energy in business; a feeling that if we work harder we will not only keep our jobs but somehow can make things happen where some say ‘we need to wait this thing out.’ Tim Scott, a good friend and active residential real estate broker in Manhattan was telling me recently of some startling deals that have fallen apart, with substantial ‘cash money’ (as my grandfather used to call it) left on the table. But, he also reports that there’s a lot of activity with people looking at apartments and buildings although there is a sense that there are ‘deals to be had.’ But whether it be an apartment, a working loft or a building to me it all boils down to how motivated either the seller or the buyer is. On March 24th (my mothers birthday) I’m going to be moderating a panel at the iGlobalForum 2nd annual real estate private equity summit in New York. My panel is titled: VALUATION AND PRICING STRATEGIES FOR DISTRESSED ASSETS: The RTC Redux? I’m now seeking out a representative from each of the buy/sell/hold contingents to join me in a dialogue (or debate) on this very subject, which I expect will be supported by someone from the valuation community as well. It should be a lively exchange of ideas. So now, to conclude with another quote from David Snow at PERE: “…as the years go by, expect to see the 2005, 2006 and 2007 vintage years put blemishes on the overall track record of private equity real estate. As is the case with most long-term asset classes, vintage years directly before recessions tend to perform poorly, while vintage years during and directly after recessions tend to be great. Given the depth of the current crisis, astute LPs are right to be eager about the 2009 and 2010 vintage years, even though the capital has yet to be deployed. (SF Note: Not only not yet deployed but in many cases not even raised yet…another challenge we are curious to see play out).

Have a good weekend!

Steve


Where I'll be:

Jan. 13-14: Cleveland, OH
Jan. 16-18: Ormond Beach, FL for the first 'annual' Felix Family Birthday Celebration
Jan. 28: Washington, DC
Feb. 17: Atlanta, GA
Feb. 18: Raleigh, NC
Feb. 19: Chapel Hill, NC to attend the Kennan-Flagler Center for Real Estate Development’s Annual Conference and Real Estate Challenge Case Competition.
Mar. 10-13: Cannes to attend MIPIM, host the second annual MIPIM Summit TV show and attend INREV's Annual General Meeting.
Mar.24: New York to moderate a panel at the IGlobal Forum Real Estate Private Equity Summit
Mar. 25-26: Washington DC to attend PREA's Spring Conference
April 1: Champaign-Urbana, IL to attend a very special music recital
Apr. 24: New York, Madison Square Garden to watch Syracuse beat St. Johns (College Basketball).



These are my personal views and not that of my employer.