In the post-recession era, success in the land use and real estate industry will hinge on finding the right balance between satisfying the interests of building investors and owners as well as those who use and occupy the buildings, according to a panel of industry experts speaking at ULI’s recent Real Estate Summit at the Spring Council Forum in Phoenix, Arizona.
Moderated by ULI Chairman Jeremy Newsum, the panel was assembled to respond to remarks Newsum made at ULI’s 2010 Fall Meeting, in which he noted that during the economy’s boom times, real estate industry professionals “lost control of the agenda” to financial institutions focused on short-term returns.
The panelists — Michael Fascitelli, president and chief executive officer of Vornado Realty Trust; Robert J. Lowe, Sr., chairman and chief executive officer of Lowe Enterprises Real Estate Group; Martin Stein, Jr., chairman and chief executive officer at the Regency Centers Corporation; and Lawrence Yun, chief economist of the National Association of Realtors – concurred that the pendulum has now swung to a point in which real estate and land use is viewed far more as a long-term business, yielding long-term gains for those who are patient and have realistic expectations.
While real estate development is a business with many constituencies, the industry professionals who focus on delivering a product in high demand by building users will ultimately be delivering favorable returns to those who are investing in their companies, panelists noted. “If we don’t become better listeners, and better at understanding how our buildings affect the pleasure of people, we will never be offering anything other than narrow brackets of choice,” Lowe said. “Because we shape the physical environment, we wield clout, and if we see as our mission the fulfillment [of ourselves] as human beings, we will make the industry more stable.”
“We have to balance the needs of a complicated matrix of constituencies,” Fascitelli said. “When we buy or develop, a project can take years. Share prices are an influence, but in the end, you have to do what you think is right. The key is that you are making the right decisions. It’s all about how you execute [business decisions].”
“As business leaders, we can set the right course, and that will lead to the creation of long-term value for shareholders,” Stein said. “Real estate is a development business and an investment business, but it is, above all, a people business.”