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Editor's Statement

Real Estate Issues, Winter 2006/2007 by Cochran, Maura M

IN MY ROOKIE YEAR, now more than 30 years ago, an industry leader whose name I have long forgotten said that to succeed in real estate you needed either a background in finance or law and had to learn architecture, engineering and planning; or a background in architecture, engineering and planning and had to learn finance and law.

He theorized that many a bad portfolio decision was made by those with MBAs who had never taken a course in urban planning and, therefore, did not understand the dynamics of a community; or those who had never taken a basic construction course and didn't know what they were looking at when they did a site inspection. On the flip side, there are architects who don't understand that buildings need to be leased at market rates with an efficient floor plate.

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When the downturn happened in the early 1990s, his observations were prophetic. As buildings went back to lenders in foreclosure, it became evident that many of the projects never should have been built in the first place.

His words have been a focal point of my career. Because my background is in architecture and urban planning, I have consciously affiliated with team members who bring the missing pieces of the puzzle to the solution. The CRE organization is a major part of that knowledge base-through Counselors sharing their experiences and life work and, in more than a few occasions, partnering with my firm to win and complete assignments. Overall, CREs have an intellectual curiosity that makes even casual encounters educational.

Real Estate Issues mirrors the Counselor community. Three times a year, it presents current thinking and research from our members and other industry leaders. This issue has four main sections:

* Land Use

* International Issues

* Tax and Regulation

* Economy

LAND USE

The issue leads off with a synopsis of Steve Rushmore's presentation from the recent CRE Annual Convention, held October 2006 in Maui, Hawaii. As one the leaders in the hospitality and hotel industry, his insights gave a great perspective to a complex topic.

Next is the first installment of a new REI feature: a roundtable discussion. The panel, led by CRE Marilee Utter, delved into the characteristics of great cities and how to encourage smart, sensitive development that is contextually appropriate in cities across the U.S. Panelists James Curtis, CRE, Richard Hanson, CRE, and Lynn Sedway, CRE, all have distinct views about issues such as mass transit and zoning. I'm sure readers will follow their discussion with interest.

After having seen the film "An Inconvenient Truth," CRE Richard Ward's article about floodplain development strikes home. He makes a strong case for changing land-use policies to avoid more disasters such as the Hurricane Katrina aftermath and the Great Flood of 1993, which decimated scores of communities along the Mississippi and Missouri rivers.

INTERNATIONAL ISSUES

This ongoing department includes three articles focusing on global matters. David Lynn, Ph.D., CRE, discusses the pros and cons of investing in property markets outside the United States. He points out that "investors... could potentially enjoy higher returns, increased portfolio diversification, greater variety of investment vehicles and the opportunity to benefit from the growth of the global economy."

Barry Gilberston, CRE, FRICS, presents the second of a four-part series encapsulating his perspective on the state of the property market in the United Kingdom. (Visit the online REI archives at www.cre.org/publications/rei_abs.cfm to read the first article, which was published in the Fall 2006 edition of REI. ) Though he concentrates on the UK, the issue of ever-rising values in the commercial property sector affects markets worldwide.

Mary Bujold, CRE, has written a resource review of The Right to Buy: Analysis & Evaluation of a Housing Policy. The book, written by Colin Jones and Alan Murie, details the background and policies of council housing in the United Kingdom. Similar to affordable housing in the United States, council housing has gone through numerous phases with varying degrees of success. The review provides insights that consultants who deal with housing in many parts of the world will find valuable.

TAX AND REGULATION

These articles are a must read because they cover new regulatory issues. Dianne Cracker's article about environmental due diligence addresses the changes in requirements that took effect Nov. 1,2006. The U.S. Environmental Protection Agency's new All Appropriate Inquiry rule has created a great deal of uncertainty in the market as practitioners try to interpret and implement the guidelines.

Mike Cannon, CRE, offers his review of USPAP in Plain English, written by John Leary, CRE, FRlCS, and Albert Franke III. Though I am not an appraiser, I am glad to know of a resource I can turn to-and CREs I can call-that address an issue that touches so many real estate transactions.

ECONOMY

Kenneth Riggs, CRE, is a regular contributor to REI. Many know Riggs from the many reports that his company, Real Estate Research Corp., produces. His perspective pieces about the economy provide a great continuity for those of us who need to track leading performance criteria and explain the market to clients.

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Editor's Statement

Real Estate Issues, Winter 2006/2007 by Cochran, Maura M

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