Three themes recur throughout this issue: design, finance, and flexibility, with the third being the element that frees the tools of design and finance to better meet new challenges. The design of workspaces, in particular, is introducing much more flexibility to acknowledge the realities of working in the age of wireless internet access and cloud-based storage, both of which allow people to work in smaller spaces.

But the trend toward open, flexible, more egalitarian workspaces is also driven by the tastes and habits of the millennial generation—those age 14 to 32 who now constitute the United States’ largest age group. They have grown up with a habit of upgrading to the latest thing—swapping out the CD player for the iPod; rushing to download songs free (though illegally) from Napster; trading in their iPods for smartphones (which they upgrade every year or two); and streaming internet “radio.” Many millennials are just as comfortable with the idea of trading in a workspace (and employer) if that environment can’t keep up with changes in technology and work habits.

Yet the workplace is not all about millennials—at least not yet. And real estate has a longer shelf life than a smartphone. That’s where flexibility comes into play. In this issue you will find examples of how leaders in the real estate and design businesses are trying to create workspaces that are flexible enough to accommodate the work styles of millennials, the baby boomers (who have only recently started to choose retirement), and the oft-overlooked group in between, generation X. Indeed, it is gen Xers, now between the ages of 34 and 49, who will be the decision makers for their companies and have to balance these competing demands.

The flexibility to adapt to changing circumstances is also critical in the financial arena. On page 37, ULI Senior Fellow for Finance Stephen Blank sounds the alarm about weakening underwriting standards co­inciding with a glut of capital chasing investment opportunities and the inevitable prospect of rising interest rates. Steve’s perspective is shaped by a career that has spanned investment banking and corporate finance roles at firms such as Oppenheimer & Co.; Cushman & Wakefield; Kidder, Peabody & Co.; and Bache & Co. And some of his concerns are echoed in a Fundamentals column written by Matthew Cypher, director of the real estate finance initiative at Georgetown University’s McDonough School of Business. In the article that begins on page 107, Cypher explains how rising interest rates will affect investments in secondary markets—where so much real estate investment is being driven these days in search of adequate returns.

While we are sounding alarms, I will call your attention to Urban Land’s 40 Under 40 competition. The nomination period will close June 1. Through this competition, ULI members will choose the top 40 real estate professionals under age 40, and those selected will be profiled in this magazine and recognized at the ULI Fall Meeting in New York City in October. If you know someone who should be on that list—or if you belong on that list—get your nomination in now! You can find more information and make your nominations by going to