News
THIS MORNING'S SCHMOOZE
July 7, 2010
| Sweating our assets took on new meaning this morning as 200 of you braved the heat and humidity to join us for a real estate, construction, and development Breakfast and Schmooze at the Lighthouse Executive Conference Center. But here's a cool fact: We're doing 500% better than last year. |
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| Okay, so perhaps we've only gone from one MPH to five MPH, according to Cohen Brothers Realty CEO Charles Cohen, but we'll take anything we can get. He and Cushman & Wakefield co-chairman Bruce Mosler opened the event, with Bruce noting that NY's in a bubble—there's lots of demand created by rent changes (over 60 tenants with 100k SF plus requirements are looking for price-adjusted space), but that demand will not be sustainable without job growth. We're in a bifurcated market, with key metros like NY, DC, Los Angeles, San Francisco, and Chicago doing much better than other cities, which need to be strategic in order to recover. |
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| We have to join together and change the perspective of real estate, which has become two dirty words, Charles urges—there's too much up and down in the stock market, and our industry can offer stability. We have to adapt to the way things are, and fundamentals, optimism, and hard work will get us through this. It's a buy market, he notes—you're going to look back a year later and say, “I should have bought.†We're on track to perhaps do $12B in investment sales this year, an indicator that the market is recovering, Bruce adds. Expect more foreign investment, and when quality hits the market, people will move quickly. We need to keep an eye on the sovereign debt in Europe, stock markets, and the 800-pound gorilla of employment. |
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| And we have some breaking news from Downtown—World Trade Center Tower 3 is starting construction this week, which means Towers One through Four are now all under construction, says World Trade Center Properties president Janno Lieber (right, with Halcrow North America president Michael Della Rocca, and LePatner & Associates founder Barry LePatner). He says there will be tremendous demand for green, high-tech space. More clients are improving their buildings to get a competitive edge, Michael notes, but lack of public funding will be a concern for certain projects. It will take years before job growth brings demand for new buildings, Barry adds—but when it's time for projects, owners cannot succumb to fast-track construction, and should rely on fixed-priced contracts for on-time, on-budget delivery. |
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| Skanska USA's Beth Heider (right, with FTI Schonbraun McCann Group senior managing director Joseph Castellano and RMJM's Richard Bailes) notes that green building needs a shift in mentality—you need to create a space that reduces energy usage and helps people work better. (Skanska's new offices at the Empire State Building has seen a 57% energy reduction and 18% drop in sick days.) But don't be so green that you can't make an economic argument. If you don't present a design that can be constructed affordably and functionally, clients won't build, Richard says. There's been demand for interior design and adaptive reuse on the architectural side, he adds, and although there's been some loss of head count, RMJM has been able to sustain and grow in outside markets. |
