Seattle seattle refinance mortgage by jolinmilioncherie

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                    The




                                                     T H E   F O R U M    F O R   L E A D E R S   I N   R E A L   E S TAT E

      Published by THE COUNSELORS OF REAL ESTATE ® The professional organization for the most trusted advisors in real estate




Pasquarella Leads CRE into 2010                                                                           Proposed 2010 CRE
ARTHUR P. PASQUARELLA, CRE, assumed the               Pasquarella is a principal at BPG Properties,
                                                                                                          Strategic Plan Now
role of 2010 Chair of the Board of The                Ltd. in Philadelphia, and serves as the firm’s      in Members’ Hands
Counselors of Real Estate on October 14 at the        chief operating officer overseeing its real
2009 CRE Annual Convention in New Orleans.            estate investment decisions and property            BY NOW, CREs have received the final draft of
                                                      operations. BPG is a private equity real estate     the 2010 CRE Strategic Plan—the document
“I am humbled by the trust placed in me by                                                                that will direct the activities of The Counselors
the CRE Board of Directors to                                         fund manager and operator
                                                                      with a nationwide portfolio         of Real Estate through 2015. Developed by a
lead our fine organization                                                                                37-person Visioning Group during its third
this year, and I look forward                                         of more than $5 billion in
                                                                      value. He specializes in            and final meeting in New Orleans, the Plan
to working with many of you
                                                                      operating portfolios in the         includes three primary components:
over the coming months,”
said Pasquarella on accepting                                         value-added space for                  CRE Mission Statement;
his new position. “These are                                          institutional investors.               CRE Core Values;
challenging times for our                                             Active in The Counselors of
industry, but I also recognize                                                                               CRE Goals for 2010–2015.
                                                                      Real Estate since joining in
the enormous opportunity                                              1991, Pasquarella has served        Key differences in the 2010 Plan, from that
the current economic climate                                          on various committees over          under which the organization currently oper-
presents for Counselors to                                            the years including execu-          ates, include: greater emphasis on outside recog-
provide the best in advisory                                          tive, strategic planning,           nition of the CRE credential and the expertise it
services for their clients.”                                          ethics, education, bylaws,          represents; an elevated understanding of the
Pasquarella’s leadership team Arthur P. Pasquarella, CRE              membership, finance and             value proposition for all CRE stakeholders; and
includes First Vice Chair John                                        the board of directors. In                                       please turn to page 5
J. Leary, CRE; Second Vice                                            2009, he led the newly
Chair Kenneth P. Riggs, Jr., CRE; Liaison Vice        formed Sponsorship Task Force, which
chairs Theddi Wright Chappell, CRE; Julie M.          enables Counselors, their companies and               Winter 2009/2010
McIntosh, CRE; F. Thomas Ustler, CRE; and             select partner companies to sponsor events            EDITOR’S STATEMENT . . . . . Inside Cover
CRE President and CEO Mary Fleischmann.               at CRE national meetings.                             2010 LEADERSHIP . . . . . . . . . . . . . . . . . 1
                                                                                                            OUTGOING CHAIR’S MESSAGE . . . . . . 2
                                                                                                            INCOMING CHAIR’S MESSAGE . . . . . . . 3
                                                                                                            NEWS AT A GLANCE . . . . . . . . . . . . . . . 4
                                                                                                            NEW MEMBERS . . . . . . . . . . . . . . . . . . . 6
                                                                                                            MEMBER NEWS . . . . . . . . . . . . . . . . . . . 8
                                                                                                            CHAPTER NEWS . . . . . . . . . . . . . . . . . . 14
                                                                                                            FROM SEAT 9F . . . . . . . . . . . . . . . . . . . 15
                                                                                                            2009 ANNUAL CONVENTION . . . . . . . 16
                                                                                                            JAY’S COUNSELOR SURVEY . . . . . . . . 34
                                                                                                            MARKET MONITOR . . . . . . . . . . . . . . . 36




                                                                                                                             2010
                                                                                                                                                           M AY 2 3 - 2 6




     THE CRE 2009 ANNUAL CONVENTION
     MEETING RECAP in WORDS & PICTURES                   page 16
                                                                                                              Seattle
                                                                                                              CRE MIDYEAR MEETINGS
Editor’s Statement                                            J A Y M A R L I N G , I V, C R E




                       FROM ALL ACCOUNTS,              same time, sellers who are under pressure to          Counselor is “going
                       the 2009 CRE Annual             raise cash for redemptions or to maintain debt        green” and will be avail-
                       Convention in The Big           covenants are looking to make strategic dispo-        able in electronic form
                       Easy was a great suc-           sitions. With so much high-quality real estate        only on the CRE Web
                       cess. Major thanks go           now available, buyers are focused on acquiring        site at www.cre.org.
                       out to Al Pappalardo,           premier assets at a 30–40 percent discount            Aside from being the
                       CRE, who did an out-            from their pricing at the peak of the market.         environmentally friend-
                       standing job program-           Another important metric in the minds of              ly thing to do, this will
                       ming the event. I was           buyers has been the total acquisition price to        save our organization a
Jay Marling, IV, CRE   unable to make it to            replacement cost, which is now in the 60–70           substantial sum in
                       New Orleans myself              percent range for the best quality assets.            printing and postage Kiran Marling 6 lbs. 4 oz.
                       because my wife Suni            Because of the difficulty in capitalizing new         costs in this difficult Born September 5, 2009
had recently given birth to a healthy baby             acquisitions, however, it now seems that it will      economy. It also seems
boy, but I know many CREs enjoyed learning             be late 2010—at the earliest—that we might            fitting that we are making this change as we
about how New Orleans is rebuilding and                see concrete signs of a recovery.                     bring our Midyear Meetings to Seattle—not
recovering from the devastation of                     By way of conclusion, I would like to mention         only does Associate Editor Jeanette Rice hail
Hurricane Katrina. Perhaps this is an apt              a couple of noteworthy changes taking place           from Seattle, but the city is home to the origi-
metaphor for what needs to happen in our               here at The Counselor. First, I want to wel-          nal Green movement. I look forward to seeing
real estate markets? You can read coverage of          come Jeanette Rice, CRE, as the new                   you all there in May.
the sessions beginning on page 16.                     Associate Editor for 2010. Jeanette is a first-
While the real estate industry is still badly          rate researcher who will make important con-
troubled, there are a few encouraging signs.           tributions to the content and quality of this
There is now a trickle of transaction activity as      publication. We are also adding two commit-
a few of the well-capitalized investors who are        tee members; Paul G. Johnson, CRE; and
in a position to make acquisitions have started        Andrew C. Warren, CRE. As well, we want to
                                                                                                                           E D I T O R   I N    C H I E F
to gradually wade back into the market. At the         let you know that beginning in 2010, The



                                        OUR MISSION                             REAL ESTATE COUNSELOR                   COUNSELOR
                                        To be the forum for                     A real estate counselor is an advi-     OF REAL ESTATE
                                        leaders in real estate                  sor who brings a broad range of         Those designated a Counselor
                                                                                real estate experience and techni-      of Real Estate, or CRE, are
                                        OUR VALUES                              cal competency to assignments for       recognized by their peers as
     The
                                           Integrity                            clients. While objective in analysis,   having consistently demonstrated
  COUNSELOR                                Competence
                                                                                the counselor directs his/her
                                                                                efforts toward the clients’ best
                                                                                                                        the highest levels of knowledge,
                                                                                                                        experience, competency,
                                           Community                            interests through evaluation of         integrity, and judgment.
                                                                                options, advocacy of the clients’
 Winter 2009/2010                          Trust
                                                                                interests, and development of           2010 CHAIR OF THE BOARD
 Volume 54, Issue 3                        Selflessness                         appropriate strategies.                 Arthur P. Pasquarella, CRE

 Published three times                  OUR GOALS                               REAL ESTATE COUNSELING                  EDITOR IN CHIEF
 annually for the members of               To provide a platform for pro-       Unlike management, appraisal,           Jules “Jay” Marling, IV, CRE
 The Counselors of Real Estate          fessional relationships, insight and    brokerage or similar practices,         ASSOCIATE EDITOR
                                        access to diverse experience            counseling is not a discipline but a    Jeanette I. Rice, CRE
 430 N. Michigan Ave.
                                           Through active participation,        process. However, a manager,
 Chicago, IL 60611                                                                                                      COMMITTEE MEMBERS
                                        contribution and camaraderie,           appraiser, broker or other practi-
 PHONE (312) 329-8427                                                           tioner may be counseling if he/she      Paul G. Johnson, CRE
                                        members enhance the benefits of                                                 Andrew C. Warren, CRE
 FAX (312) 329-8881                     a diverse professional community        provides advice or guidance to
 E-MAIL info@cre.org                                                            clients that significantly impacts      PRESIDENT AND CEO
 WEB www.cre.org                           To communicate within the            their real estate decisions, and        Mary Walker Fleischmann
                                        membership and the marketplace          such advice is rendered solely for
                                        that our members are the preemi-        the use of the party receiving the      MANAGING EDITOR
                                        nent source of real estate knowl-       advice and without personal bias        Carol Scherf
                                        edge and advice                         and/or conflict of interest.
                                                                                                                         We welcome your questions
                                                                                                                         and comments about The
                                                                                                                         Counselor newsletter. Please
                                                                                                                         email thecounselor@cre.org.
2010 Officers




CHAIRMAN OF                  FIRST VICE                 SECOND VICE              LIAISON VICE                LIAISON VICE              LIAISON VICE
THE BOARD                    CHAIRMAN                   CHAIRMAN                 CHAIR                       CHAIR                     CHAIR
Arthur P. Pasquarella,       John J. Leary,             Kenneth P. Riggs, Jr.,   Theddi Wright Chappell,     Julie M. McIntosh,        F. Thomas Ustler,
CRE                          CRE                        CRE                      CRE                         CRE                       C RE
                             As first vice chair,       As second vice chair,    Chappell will oversee the   McIntosh will oversee     Ustler will oversee the
                             Leary will have over-      Riggs will oversee       Education Committee         the Chapter Activities    Dispute Resolution,
                             sight responsibility for   the Bylaws and Ethics    and Business Issues         and Membership            Consulting Corps,
                             the Budget and             committees. He is        Subcommittee; the 2010      Development               Communications, and
                             Finance, Executive and     positioned to            Midyear Meetings and        committees; and           Tax, Regulatory and
                             Strategic Planning         become chair of          Annual Convention; the      the Invitation and        Legislative commit-
                             committees. He will        the board in 2012.       International Committee;    Invitation Advisory       tees; and CRE’s two
                             become chair of the                                 and The Counselors of       committees.               publications: Real
                             board in 2011.                                      Real Estate Foundation.                               Estate Issues and The
                                                                                                                                       Counselor.



2010 Board of Directors
Jonathan H. Avery, CRE                     Deborah B. Haskell, CRE                Marc Louargand, CRE                       Stephen P. Navarro, CRE
Acton, Massachusetts                       Washington, D.C.                       Storrs, Connecticut                       Greenville, South Carolina
Maura M. Cochran, CRE                      Alan A. “Scotty” Herd, CRE             Robert H. McKennon, CRE                   Jean C. Pinard, CRE Emeritus
Hartford, Connecticut                      Los Angeles, California                Wilmington, Delaware                      Sutton, QC Canada
Michel Couillard, CRE                      Kirk A. Heyle, CRE                     Robert H. McKenzie-Smith, CRE             Jeanette I. Rice, CRE
Montreal, QC Canada                        Springfield, Missouri                  Ft. Worth, Texas                          Ft. Worth, Texas
Alice J. Dutton, CRE                       Thomas M. Justin, CRE                  John A. Meltzer, CRE                      Noah D. Shlaes, CRE
Vero Beach, Florida                        New York, New York                     Ouray, Colorado                           Chicago, Illinois
Howard C. Gelbtuch, CRE                    James S. Lee, CRE                      Alfons Metzger, CRE                       Lewis W. Stirling, III, CRE
New York, New York                         Chicago, Illinois                      Vienna, Austria                           New Orleans, Louisiana
Otis E. Hackett, CRE                       Gerald M. Levy, CRE                    Scott R. Muldavin, CRE                    Arnold S. Tesh, CRE
Woodland Hills, California                 New York, New York                     San Rafael, California                    Washington, D.C.



2010 Committee Leadership
  BUDGET & FINANCE COMMITTEE                               DISPUTE RESOLUTION COMMITTEE                          MEMBERSHIP DEVELOPMENT COMMITTEE
  Richard Tannenbaum, CRE Chair                            Edward W. Dinan, III, CRE Chair                       Von W. Moody, III, CRE Chair
  Michel Couillard, CRE Vice Chair                         James Mike Duncum, CRE Vice Chair                     Patrick O. Mayberry, CRE Vice Chair

  BUSINESS ISSUES SUBCOMMITTEE                             EDUCATION COMMITTEE                                   MEMBERSHIP LIAISON
  Deborah B. Haskell, CRE Chair                            Joseph G. Nahas, Jr., CRE Chair                       Gregory B. Ibbetson, CRE Chair
  Michael S. MaRous, CRE Vice Chair                        Peter F. Korpacz, CRE Vice Chair
                                                                                                                 MIDYEAR MEETING COMMITTEE
  BYLAWS COMMITTEE                                         THE COUNSELORS OF                                     (Seattle, May 23 – 26)
  Arnold S. Tesh, CRE Chair                                REAL ESTATE FOUNDATION                                Laura R. Huntington, CRE Chair
  Benjamin E. Barnett, CRE Vice Chair                      Ivan Faggen, CRE Chair
                                                           Albert S. Pappalardo, CRE Vice Chair                  NOMINATING COMMITTEE
  CHAPTER ACTIVITIES COMMITTEE                                                                                   A. C. Schwethelm, CRE Chair
  James D. Zupancic, Esq., CRE Chair                       ETHICS COMMITTEE
                                                           Hugh F. Kelly, CRE Chair                              REAL ESTATE ISSUES EDITORIAL BOARD
  Robert J. Nahigian, CRE Vice Chair
                                                                                                                 Peter C. Burley, CRE Editor in Chief
                                                           William P.J. McCarthy, CRE Vice Chair
  COMMUNICATIONS COMMITTEE                                                                                       Mary C. Bujold, CRE Associate Editor
  Noah D. Shlaes, CRE Chair                                EXECUTIVE COMMITTEE
                                                           Arthur P. Pasquarella, CRE Chair                      STRATEGIC PLANNING COMMITTEE
  Donald P. Guarino, Jr., CRE Vice Chair
                                                                                                                 Anthony F. Souza, CRE Chair
                                                           John J. Leary, CRE Vice Chair
  CONVENTION COMMITTEE                                                                                           Byron Koste, CRE Vice Chair
  (Philadelphia, Oct. 17 – 20)                             INTERNATIONAL STEERING COMMITTEE
                                                           Jonathan H. Avery, CRE Chair                          TAX, REGULATORY
  Jay L. White, CRE Chair
                                                                                                                 & LEGISLATIVE COMMITTEE
                                                           Alfons Metzger, CRE Vice Chair
  CRE CONSULTING CORPS                                                                                           Scott R. Muldavin, CRE Chair
  STEERING COMMITTEE                                       INVITATION ADVISORY COMMITTEE
                                                                                                                 THE COUNSELOR NEWSLETTER
  Howard C. Gelbtuch, CRE Chair                            Logan H. Babin, Jr., CRE Chair
                                                                                                                 Jules H. Marling, IV, CRE Editor in Chief
  Brent A. Palmer, CRE Vice Chair                          Anthony F. Souza, CRE Vice Chair
                                                                                                                 Jeanette I. Rice, CRE Associate Editor




 W I N T E R      2 0 0 9 / 2 0 1 0                                                                                                                              1
Outgoing Chair of the Board Message                                                          A. C. SCHWETHELM, CRE




                        THE YEAR 2009 will be       It is in times of great uncertainty that the              The coming year may well be a continuation
                        remembered as one of        most knowledgeable, skilled, experienced                  of what we are experiencing now. I know this
                        attempted recovery of       and respected consultants become the most                 can be a financial challenge to each of us
                        the stock market and        sought after. The more complex the problem,               individually. There may be a need to cut
                        real estate values. There   the more important the problem-solver.                    expenses and conserve resources. But it is
                        is still much uncertain-    It is comforting to me, therefore, that the pro-          also a time when we must preserve the most
                        ty in all markets as        posed Strategic Plan includes a greater                   important assets we have. In the case of many
                        investors and lenders       emphasis on our core values and on promo-                 consultants, it is the reputation for reliability,
                        seek answers to unfin-      tion of our credential. The chaos in financial            high ethical standards, access to fellow
A. C. Schwethelm, CRE,  ished questions. What       markets has handed us an unprecedented                    experts, and professionalism. It is not a time
2009 Chair of the Board
                        additional regulations      opportunity. Now we must capitalize on it. A              to lose the CRE credential, that one asset that
will be imposed on lenders, particularly those      task force is diligently working on promoting             sets us apart.
seen as “too big to fail?” Although it seems                                                                  I enjoyed my year as Chairman of The
certain that more equity will be required to                                                                  Counselors of Real Estate. It is most gratify-
finance commercial real estate, just how                                                                      ing to know that fellow CREs respond when
                                                        “As individual members we must
much is yet to be determined. How will cor-                                                                   asked to help. Many friendships were
porations react to what appear to be fire sale          make every effort to acquaint our
                                                        clients with the credential, what it                  strengthened and new ones made. As an
prices—will they take advantage of the mar-                                                                   organization we accomplished many of the
ket and purchase real estate required for their          stands for, and the availability of
                                                         experts on a broad array of real                     things I hoped for, but left ample opportuni-
operations, or will the past wild swings in                                                                   ties for Art and John as well. I again thank all
value discourage them from investing? Will           estate-related disciplines. Membership
                                                                                                              of those who helped me in so many ways,
the current trend of saving by consumers con-         in The Counselors of Real Estate sets
                                                                                                              including Mary Fleischmann and her staff of
tinue, decreasing spending and thereby delay-           us apart from would-be experts.”
                                                                                                              professionals. Unless you have interacted
ing job growth? The huge proposed govern-                                                                     with them as a committee chair or other
ment expenditures on infrastructure will                                                                      position that requires close work with a staff
result in winners and losers. Some areas will       the CRE credential and the things it stands for           person, you cannot fully appreciate how truly
become more attractive in terms of availabili-      to those in decision-making positions. As                 a professional staff it is. I especially thank my
ty of public services, resulting in relocation of   individual members we must make every                     Leadership Team. We worked together so
businesses and residents. They will also work       effort to acquaint our clients with the creden-           very well. I assure you our organization is in
to benefit some services and industries rela-       tial, what it means, and the availability of              capable, dedicated hands.
tive to their competitors. For instance, an         experts on a broad array of real estate-related
effort to provide fiber optic cable to millions     disciplines. Membership in The Counselors of
more homes may work to the disadvantage of          Real Estate sets us apart from would-be
satellite service providers. Regulators,            experts.
investors, lenders and others are struggling
with these questions and seeking advice.                                                                       2 0 0 9   C H A I R    O F     T H E   B O A R D




         The 2010                                      The James Felt Creative Counseling Award is a celebration of outstanding achievement

     JamesFelt                                         and ingenuity by members of The Counselors of Real Estate.
                                                       Every CRE counsels clients or employers on complex real estate issues in an ethical,
                                                       objective, and expert manner. The James Felt Creative Counseling Award recognizes the


     Creative                                          most innovative and creative of this counseling. The Award enhances the public recognition
                                                       of the CRE designation, the counseling profession, and The Counselors of Real Estate
                                                       organization itself.


     Counseling                                        Established in 1992, the James Felt Creative Counseling Award honors the memory of the
                                                       late CRE James “Jack” Felt, a prominent real estate pioneer, founding father of The
                                                       Counselors of Real Estate, former Chairman of the New York City Planning Commission, and



     Award
                                                       a trustee of many well-known corporate and eleemosynary boards. Felt was known for his
                                                       strong sense of integrity and client accountability
                                                       in applying his creative counseling techniques to      Submission Deadline: March 15, 2010
                                                       resolve complex real estate problems.




 2                                                                                                                              T H E     C O U N S E L O R
Incoming Chair of the Board Message                                                             A R T H U R P. P A S Q U A R E L L A , C R E




                            As I assume my new          as enhancing the organization’s value to               Another way in which I plan to enhance expo-
                            role as 2010 Chair of       you—our members—and bringing greater                   sure of the CRE credential is through our new,
                            The Counselors of Real      visibility of our aggregate expertise to the           fledgling Sponsorship Program, which I led in
                            Estate, I do so with a      public at large. I believe there has never been        2009. This initiative brings enhanced visibili-
                            deep sense of humility      a greater need for the collective knowledge            ty to the organization, its members and the
                            and a tremendous            and varied experience that Counselors of               CRE credential by enabling companies to
                            pride in the organiza-      Real Estate offer, nor an era during which the         become more familiar with our educational
                            tion and its members,       stakes were higher to provide it.                      offerings and the unique CRE culture in
                            each so gifted in their     Serving as a guidepost for me in 2010 will be          which we take such pride. We need to acceler-
Arthur P. Pasquarella, CRE, chosen area of expert-                                                             ate our efforts to make companies and service
2010 Chair of the Board                                 our new Strategic Plan, which we plan to sub-
                            ise. Most of all, I do so   mit to the Board for adoption during our               providers aware of this opportunity—the
with a sobering awareness of the extraordi-             Midyear Meetings in Seattle (May 23–26). This          benefits run both ways. Finally, I plan to work
nary challenges we face as together we navi-            plan will set the framework for our goals              closely with our international members to
gate another year of major economic turmoil                                                                    strengthen our ties abroad, increase our visi-
in our industry and our world.                                                                                 bility, and develop a better understanding of
                                                           “I pledge to continue our ongoing                   how to effectively position the CRE brand
Before discussing the challenges, let me first                efforts to enhance, build and
express my deep appreciation to our 2009                                                                       within the global marketplace.
                                                           communicate the value of the CRE
Chair, A.C. Schwethelm, for his wisdom and                                                                     In closing, I want to express my gratitude to
guidance over the past year. A.C’s leadership                 credential—to our members,
                                                                                                               The Counselors of Real Estate for offering me
was characterized by inclusiveness, pure and                 prospective members, users of                     an experience like no other. Being a part of
simple. There was not a decision made or a                consulting services, and communities                 the CRE organization has been enormously
course taken in 2009 which did not include                       throughout the world.”                        rewarding on a variety of levels not only for
the counsel of 2010 Vice Chairman, John                                                                        me, but for my wife Gail. We have developed
Leary, and me, ensuring the diverse view-               through 2015. All of you have received a copy          deep friendships with many of you, and it is
points yet continuity of leadership so critical         of the draft plan, but let me reiterate its two pri-   with the greatest joy that we plan to widen
to the success of any organization, especially          mary goals: greater emphasis on outside recog-         that circle in the years ahead. Most of all, I
those with strong volunteer components.                 nition of the CRE credential and the expertise         look forward to being of service to you, to our
Secondly, I extend special thanks to all of             it represents; and an elevated understanding of        great organization and to an uncertain world
those who agreed to serve in positions of               the value proposition for all CRE stakeholders.        which needs the vision and perspective of
committee leadership or as members of a                 These goals summarize the major ways in                The Counselors of Real Estate—now more
committee/work group. I was very taken with             which I am personally committed to moving              than ever.
the ready willingness of these individuals to           the CRE organization forward during my                 Best wishes to you and your families for a
say “yes,” particularly during this period of           year as Chairman. I look forward to embrac-            happy and healthy holiday season.
unprecedented demand on time and creative               ing the ideals at the core of the CRE organiza-
thinking. Such action reflects well on the cul-         tion. Further, I pledge to continue our ongo-
ture of “selflessness,” long the hallmark of the        ing efforts to enhance, build and communi-
CRE organization.                                       cate the value of the CRE credential—to our
The real estate industry continues to experi-           members, prospective members, users of
ence turbulent times. While we don’t know               consulting services, and communities                   2 0 1 0   C H A I R   O F   T H E   B O A R D
what the coming year will bring, I see my job           throughout the world.




                                                                                                                 2010
                                                                                                                                                       M AY 2 3 - 2 6




                                                                                               Seattle
                                                                                                CRE MIDYEAR MEETINGS


 W I N T E R       2 0 0 9 / 2 0 1 0                                                                                                                                    3
 News at a Glance

2010 Leadership                                 During 2009, the Dispute Resolution              The Counselor Goes
                                                Management Committee examined several
Team Takes Office                               possible directions for the program through      ‘Green’ in 2010
The 2010 Leadership Team began its term,        a subcommittee appointed by 2009                 In a nod to going “green,” and with an eye
led by Chairman of the Board Art                Committee Chair Richard Marchitelli, CRE.        on the budget, all Counselor newsletters
Pasquarella, at the 2009 Annual Convention      Led by Ed Dinan, CRE, who is now the 2010        going forward will be available only in
held in New Orleans in October. For the         Dispute Resolution committee chair, the          electronic form on the CRE Web site at
complete list of officers, committee chairs     subcommittee members were CREs Herbert           www.cre.org. We will announce when each
and vice chairs, see page 1.                    Davis, James M. (Mike) Duncum, Alice             2010 issue is available for viewing and
                                                Dutton and James (Jack) Sylvester.               downloading.
18 New Members Invited                          All CRE members who practice mediation or
The Invitation Committee invited 18 individ-    arbitration, or want to learn about it, will     New Seattle Meeting Dates
uals to join The Counselors of Real Estate at   have increased opportunities for interaction,    Reminder: dates for the 2010 Midyear
its 2009 Annual Convention in New Orleans.      discussion and learning as the 2010 Dispute      Meetings in Seattle have been changed to
Contact information for new members can         Resolution Committee keeps members               May 23–26.
be found in the Members Only section of the     advised of developments in the field and
CRE Web site at www.cre.org. Counselors are     ways in which interested CREs might devel-       Submissions Invited for
encouraged to write welcome letters or          op a mediation and/or arbitration practice.
emails to the new group of CREs. See pages                                                       the James Felt Creative
6–7 for more details and contact information    Award Winners Announced                          Counseling Award
for new members.                                Winners of the Landauer/White, Committee         The James Felt Creative Counseling Award
                                                Service and Ballard awards were recognized       celebrates outstanding achievement and
Trust Fund Recipients                           at the 2009 New Orleans Annual Convention.       ingenuity by members of The Counselors of
Approved                                        Jonathan David Harris, CRE, FRICS, was           Real Estate. Counselors may nominate their
                                                the recipient of the James D. Landauer/John      own work or the work of another CRE by
Two programs were approved to receive                                                            submitting an executive summary of a coun-
                                                R. White Award, an honor that recognizes
funding from The Counselors of Real Estate                                                       seling assignment that has demonstrated
                                                outstanding professionalism, commitment to
Foundation (formerly called the James E.                                                         exceptional creativity and contributed to the
                                                service, ongoing contributions to the real
Gibbons Educational Development Trust                                                            public good. Visit the Awards section at
                                                estate industry and support of the core values
Fund) at the 2009 Annual Convention in                                                           www.cre.org for more details.
                                                of The Counselors of Real Estate.
New Orleans:
                                                Albert Pappalardo, CRE, received the 2009        Submission Deadline:
   $20,000 to the Kenya School of Monetary
   Studies to establish a small student
                                                Committee Service Award for his long-term        March 15, 2010
                                                dedication to CRE committee service, which
   exchange program in Africa. Proposer:        spans his 23 years as a Counselor. Pappalardo
   Howard C. Gelbtuch, CRE;                                                                      The CRE Foundation Seeks
                                                also served as program chair of this year’s
   $15,000 to the Community Design              Annual Convention in his native city of New      ‘Proposals for Funding’
   Collaborative to support the third phase     Orleans, planning and organizing its many        The Counselors of Real Estate Foundation
   of the Infill Philadelphia project, which    events and educational sessions.                 (formerly known as the James E. Gibbons
   will focus on retooling and recycling        In a tie, three winners were honored with the    Educational Development Trust Fund)
   Philadelphia’s industrial landscape as       Ballard Award for articles in the 2008–2009      underwrites worthwhile projects of social,
   sustainable, 21st century workplace envi-    Special Focus “green” issue of Real Estate       community or international significance that
   ronments. Proposer: Michael Sklaroff,        Issues: Frederick F. Butters, FAIA, Esq., won    benefit the needs of society, the commercial
   Esq., CRE.                                   for his article on emerging legalities of        real estate industry and the membership of
                                                “green” building; and co-authors Ujjval K.       The Counselors of Real Estate.
CRE Dispute Resolution                          Vyas, Ph.D, J.D., and Pierce H. Jones, Ph.D.,    CREs are encouraged to identify projects
Takes New Direction                             won for their article that evaluated the long-   that they believe are worthy recipients of
                                                term effects of “green” building in a Florida    funding. “Proposals for Funding” should
Recognizing that there is broad interest in     residential development. See pages 22–23 for     include an executive summary of the proj-
dispute resolution within the CRE member-       more information on the awards.                  ect, execution timetable, budget and other
ship, CRE’s Dispute Resolution program will                                                      details. Visit The CRE Foundation Overview
refocus to become a Business Issues Forum                                                        section at www.cre.org for more details.
in 2010. The CRE Board of Directors
approved recommendations from                                                                    Funding Proposal Deadline:
Leadership to make this transition at the                                                        April 1, 2010
CRE Annual Convention in New Orleans.


 4                                                                                                              T H E   C O U N S E L O R
                                                                                                        Proposed 2010 CRE Strategic
Networking Across Continents                                                                            Plan Now in Members’ Hands
                                                                                                        continued from cover page
FROM AUSTRIA TO THE UNITED STATES, the benefit of CRE networking is apparent—especially in
                                                                                                        increased emphasis on membership diversi-
Chicago, where CRE Alfons Metzger’s stepson Herbert Petz is spending a full year with CRE
                                                                                                        ty…all while sustaining the unique experience,
Richard A. Hanson as an intern at Hanson’s firm, Mesa Development, LLC.
                                                                                                        relevance and mindstretch inherent in the CRE
                                                             It began as a new friendship between       organization. The Plan also enhances the role of
                                                             Metzger, CEO of MRG Metzger Real           the CRE Board of Directors, which will monitor
                                                             Estate Group in Vienna, and Hanson         the Plan’s implementation and regularly discuss
                                                             that developed over a dinner during        initiatives contained therein.
                                                             MIPIM 2008 in Cannes, France. As
                                                                                                        “This document represents the views of a
                                                             time passed, the two CREs discussed
                                                                                                        membership that, over the past year, has
                                                             Metzger’s 22-year-old stepson Herbert’s
                                                                                                        demonstrated an extraordinary commitment
                                                             interest in real estate, and Hanson
                                         Alfons Metzger, CRE                                            to strategic planning,” said Tony Souza,
                                                             mentioned that Mesa offered intern-
                                                                                                                                  2009/10 Planning
                                                             ships to young people.
                                                                                                                                  Committee chair-
                                                             As a candidate, Herbert had much to                                  man. “From the
                                                             bring to the table—he is fluent in four                              Board of Directors to
                                                             languages, has a college degree, has                                 the Visioning Group
                                                             served in the military, and was, most                                to the membership at
                                                             importantly, enthusiastic.                                           large, the high vol-
                                                             “I saw this is as tremendous opportuni-                              ume of meaningful
                                                             ty for Herbert,” said Metzger. “With                                 commentary every
                                                             Richard, and as part of a new genera-                                step of the way gives
                                                             tion preparing to create the world of      Tony Souza, CRE           me great confidence
                                                             tomorrow, he will have the chance to                                 in the product we
                                                             learn the business from the ground up,     have collectively produced.”
                                                             with an international perspective.”        The Plan will be presented for adoption by the
                                                             What normally would have been a            CRE Board of Directors at the 2010 Midyear
                                                             three-month internship has evolved into    Meeting in Seattle. In the meantime, mem-
                                                             a yearlong event, as the U.S. would not    bers’ comments may be communicated to
                                                             grant Petz a work permit visa without      CRE President Mary Fleischmann at
                                                             the promise of a yearlong work pro-        info@cre.org.
                                                             gram. So, Hanson and his own son
                                                             (Richard C. Hanson) dove into the
                                                             lengthy, detailed process of filling out
                              Richard A. Hanson, CRE, (left)
                              with Herbert Petz, near the    the visa application, complete with pur-
                              Art Institute of Chicago.      chasing the required insurance.
                                                             “I’ve learned that it is almost impossi-
                                                             ble to be ‘legal’ here,” joked Hanson.
Immediately following the New Orleans Annual Convention, Petz arrived in Chicago, and
Hanson helped him find an apartment. By October 19, Herbert was working at Hanson’s
Legacy building and preparing to participate in nearly every aspect of commercial real estate.
And, he did.
“From the initial signing of the contract to the closing of the real estate transaction, I have
been actively involved in the whole process,” said Petz. “I have been given the opportunity to
correspond with purchasers, lenders and attorneys, and internally with our sales, marketing,
development, and legal team. I also have learned a great deal by preparing all the closing doc-
uments required to transfer real property from the seller to the purchaser.”
“This is an amazing relationship,” said Hanson. “Herbert is a neat young man, and we will                         Winter 2009/2010
offer him an experience that will be invaluable. The benefit for me is doing something for                 CRE Member Directory
another CRE that will be meaningful in life. Herbert will gain an invaluable amount of experi-                     Available Dec.18
ence in United States real estate development practices and we will learn about how the U.S. is                CRE members can download the
viewed through the eyes of a young bright European. And, after a year here, he will, hopefully,                 PDF Directory at www.cre.org
be a goodwill ambassador in Europe for the United States—forever. I hope more CREs will be
open to doing the same thing with interns going “across the pond,” in both directions.”


 W I N T E R      2 0 0 9 / 2 0 1 0                                                                                                                   5
 New Members
                                           Eighteen real estate advisors were invited to membership
                                           in The Counselors of Real Estate at the 2009 CRE Annual
                                           Meeting in New Orleans. Please take the time to extend
                                           your personal welcome to your new CRE colleagues.
                                           Sending your best wishes to these new Counselors
                                           demonstrates one of the organization’s most important
                                           core values – its unmatched sense of community.




Randy I. Anderson, Ph.D.                      Brian J. Curry                        Stevan J. Gromet                      Kenneth W. Kapecki
Chair, Professor of Real Estate               Managing Director, National           Principal                             Senior Manager
University of Central Florida                 Practice Leader                       Gromet & Associates                   Deloitte Financial
1361 Palmer Avenue                            Cushman & Wakefield Capital           114 Pacifica                          Advisory Services, LLP
Winter Park, FL 32789                         Markets Group                         Suite 250                             111 South Wacker Drive
PHONE: (407) 929-8321                         4435 Eastgate Mall                    Irvine, CA 92618-3321                 Chicago, IL 60606-4302
FAX: (866) 261-0315                           Suite 200                             PHONE: (949) 261-1110                 PHONE: (312) 486-2808
EMAIL: randerson@bus.ucf.edu                  San Diego, CA 92121                   FAX: (949) 261-1818                   FAX: (312) 247-2808
SPONSOR: Michael S. Sorich, CRE               PHONE: (858) 334-4051                 EMAIL: sjgromet@grometlaw.com         EMAIL: kkapecki@deloitte.com
SPECIALIZES in expert                         FAX: (858) 334-6861                   CHAPTER: Southern California          CHAPTER: Midwest
witness/litigation consulting,                EMAIL: brian.curry@cushwake.com       SPECIALIZES in legal representation   SPONSOR: Brian Johnson, CRE
economic modeling and advisory,               CHAPTER: San Diego                    of property owners/developers         SPECIALIZES in business
capital markets advisory, and                 SPONSORS: E. Cody Jetton, CRE         across most property classes,         combinations, asset impairments,
property/portfolio analytics.                 and P. Barton DeLacy, CRE             commercial distressed loan/asset      merger and acquisition due
                                              SPECIALIZES in advisory and           disposition/acquisition; full CCIM    diligence, lease advisory, and
                                              valuation services for residential    skill set.                            complex real estate disputes.
                                              development property
                                              (subdivisions, master-plans, mixed-
                                              use, detached and attached
                                              housing, military re-use, etc.).




Darin L. Buchalter
Managing Director, Head of Real
Estate Practice                                                                     Jay Hicks                             Louis W. Kluger
Navigant Consulting, Inc.                                                           Managing Director of                  Senior Principal
One Market Street                                                                   Planning and Real Estate              JM Zell Partners Ltd.
Spear Street Tower, Suite 1200                                                      United States Department of State     1900 K Street
San Francisco, CA 94105                       Farley J. Grainger                    Overseas Building Operations          Suite 850
PHONE: (415) 356-7126                         President, Owner                      Washington, DC 20522-0601             Washington, DC 20006
FAX: (415) 356-4005                           Broom, Moody, Johnson                 PHONE: (703) 516-1996                 PHONE: (202) 682-8749
EMAIL: dbuchalter@navigantconsulting.com      & Grainger, Inc.                      FAX: (703) 875-5043                   FAX: (202) 682-8751
CHAPTER: Northern California                  10550 Deerwood Park Boulevard         EMAIL: hicksja@state.gov              EMAIL: lkluger@jmzell.com
SPONSORS: Lawrence A. Souza,                  Suite 609                             SPONSOR: Joseph D. Steller, CRE       SPONSOR: Monroe J. Kaufmann, CRE
CRE and James A. Gavin, CRE                   Jacksonville, FL 32256-2811           SPECIALIZES in international real     SPECIALIZES in strategic planning,
SPECIALIZES in financial and                  PHONE: (904) 296-3000                 estate acquisitions, sales, and       finance, site selection,
operational matters for investors             FAX: (904) 296-8722                   development; corporate real           acquisition/disposition and
and lenders in commercial real                EMAIL: fgrainger@bmjg.com             estate portfolio planning and         brokerage.
estate.                                       SPONSOR: Edward A. De Laurier, CRE    management; and assisted living-
                                              SPECIALIZES in expert                 related real estate.
                                              witness/litigation support,
                                              commercial appraisals, feasibility
                                              studies, consulting, marketability
                                              analysis, private equity
                                              investments, land, and ad valorem
                                              tax consultation.




 6                                                                                                                          T H E    C O U N S E L O R
Mark Lautman                         Peter Oberlechner                         William Picoli                             Elias T. Ziogas
Economic Architect                   Partner, Head of Real Estate              Senior Managing Director                   Senior Partner,
Lautman Economic Architecture        Wolf Theiss Attorneys At Law              Grubb-Ellis                                Real Estate Consultant
4904 General Hodges NE               Schubertring 6                            1177 Avenue of the Americas                King Hellas SA
Albuquerque, NM 87111                Vienna A-1010, Austria                    New York, NY 10036                         7 Evinoy Street
PHONE: (505) 366-3234                PHONE: 43 1 515 10-5170                   PHONE: (212) 326-4816                      Athens Tower Building C
EMAIL: lautman123@gmail.com          FAX: 43 1 515 10-2517                     FAX: (212) 326-4848                        Athens 115 23, Greece
CHAPTER: Southwest                   EMAIL: peter.oberlechner@wolftheiss.com   EMAIL: william.picoli@grubb-ellis.com      PHONE: 0030 210 771 1204
SPONSOR: Curtis R. Sellers, CRE      SPONSOR: Richard A. Hanson, CRE           CHAPTER: New York Metropolitan             FAX: 0030 210 777 8995
                                     SPECIALIZES in real estate law,           SPONSOR: Robert G. Von Ancken, CRE         EMAIL: ziogas@soe.gr
                                     including corporate real estate and       SPECIALIZES in complex assignments         SPONSOR: Nicholas Chatzitsolis, CRE
                                     real estate finance.                      involving all property types, market       SPECIALIZES in land development
                                                                               analysis, highest and best use, land       and financing; shopping centers;
                                                                               development, and litigation                property portfolio management;
                                                                                                                          property taxation; PPP, PFI BOT
                                                                               support/expert witness services.
                                                                                                                          scheme development; construction
                                                                                                                          project evaluation; best use
                                                                                                                          scenarios; hotels; health care
                                                                                                                          projects; contract and deed due
                                                                                                                          diligence; and property marketing.
Sung Lee
Director
PricewaterhouseCoopers LLP                                                                                                Reinstatements
400 Campus Drive                     François Ortalo-Magné
Florham Park, NJ 07932               Professor & Chairman
PHONE: (973) 236-4771                Department of Real Estate and
FAX: (813) 741-5456                  Urban Land Economics                      Kenneth M. Shulman
EMAIL: sung.lee@us.pwc.com           University of Wisconsin                   Principal
CHAPTER: New Jersey                  School of Business                        Connected Net Lease, LLC
SPONSOR: Jules H. Marling IV, CRE    975 University Avenue                     2525 McKinnon Street
SPECIALIZES in valuation analysis    5259 Grainger Hall                        Suite 700
and consulting and investment        Madison, WI 53706                         Dallas, TX 75201
strategy.                            PHONE: (608) 262-7867                     PHONE: (214) 572-8468                      David A. Howard
                                     FAX: (608) 262-7867                       FAX: (214) 572-8476                        Consultant
                                     EMAIL: fom@bus.wisc.edu                   EMAIL: ken.shulman@connectednetlease.com   Peninsula Real Estate Capital, LLC
                                     CHAPTER: Midwest                          CHAPTER: Dallas-Fort Worth                 and Hamilton, Ricci & Associates, Inc.
                                     SPONSOR: James J. Curtis III, CRE         SPONSOR: Susan R. Gwin, CRE                505 Sansome
                                     SPECIALIZES in theoretical and            SPECIALIZES in real estate                 Suite 475
                                     applied research for the academic,        consulting and investment                  San Francisco, CA 94111
                                     professional and policy communities       brokerage focused on single                PHONE: (415) 788-7722
                                     with a focus on housing markets,          tenant retail.                             FAX: (415) 394-7778
                                     and international commercial real                                                    EMAIL: davehowardsf@yahoo.com
                                                                                                                          CHAPTER: Northern California
                                     estate investments.
                                                                                                                          SPECIALIZES in financial feasibility
                                                                                                                          decisions and investment analysis,
John P. Norman                                                                                                            appraisal of income property, and
Owner                                                                                                                     underwriting of income property.
The Taurean Group
6246 Homestead Drive
Belgium, WI 53004
PHONE: (262) 923-4050
FAX: (262) 923-4050
EMAIL: jnorman@taureangroup.com                                                Anthony Tittanegro
CHAPTER: Midwest                                                               Director,
                                     Robby D. Perrino                          Real Estate Business
SPONSOR: Alan G. Hembel, CRE
                                     Senior Managing Director                  Advisory Services
SPECIALIZES in geographic
                                     Cushman & Wakefield of                    PricewaterhouseCoopers LLP
information systems, feasibility,    California, Inc.
and market analysis.                                                           300 Madison Avenue                         Joseph G. Walsh
                                     560 South Winchester Boulevard            New York, NY 10017                         Senior Lecturer
                                     Second Floor                              PHONE: (646) 471-7251                      Department of Real Estate
                                     San Jose, CA 95128-2560                   FAX: (813) 329-1326                        and Urban Land Economics
                                     PHONE: (408) 572-4134                                                                University of Wisconsin
                                                                               EMAIL: anthony.tittanegro@us.pwc.com
                                     FAX: (408) 434-1554                                                                  School of Business
                                                                               CHAPTER: New York Metropolitan
                                     EMAIL: rob.perrino@cushwake.com                                                      975 University Avenue
                                                                               SPECIALIZES in transaction support
                                     CHAPTER: Northern California                                                         Madison, WI 53706
                                                                               and related structuring.
                                     SPECIALIZES in consulting,                                                           PHONE: (608) 890-2914
                                     appraisal, and brokerage.                                                            FAX: (608) 265-2738
                                                                                                                          EMAIL: joewalsh@bus.wisc.edu
                                                                                                                          CHAPTER: Midwest
                                                                                                                          SPECIALIZES in hotel development
                                                                                                                          and valuation consulting; teaching
                                                                                                                          real estate finance, valuation,
                                                                                                                          urban economics and computer
                                                                                                                          applications, including ARGUS.

 W I N T E R     2 0 0 9 / 2 0 1 0                                                                                                                            7
 Member News

Norris’ Firm Chosen                                         CREs to Speak                                       Lewis Quoted in
to Appraise Land                                            at VALCON 2010                                      Forbes.com
for Solar Power Plant                                                                                                            David M. Lewis, CRE, chief
                  CRE Steven R. Norris’ firm,                                                                                    executive officer of Houston-
                  Norris Realty Advisors, of                                                                                     based Lewis Realty Advisors,
                  Pasadena, California, has                                                                                      recently was quoted in
                  been selected to determine                                                                                     Forbes.com, commenting on
                  the fair land rent for the land                                                                                the “health” and differences
                  underlying one of the largest             Benjamin E. Barnett, CRE   Arnie Tesh, CRE
                                                                                                                                 between the real estate mar-
                  proposed utility-grade solar                                                                  kets of Houston and Phoenix. Though
power plants in the U.S., which will be locat-                                                                  Phoenix has suffered the steepest annual
ed in the Imperial County desert, west of El                                                                    drop in home values of any city in the
Centro, California. The site consists of 6,500                                                                  nation, Lewis is quoted as saying that
vacant desert acres. Dubbed “Solar Two,” the                                                                    Houston real estate remains resilient
project is proposed to be a 750-megawatt                                                                        through the national economic crisis, and
solar facility, and is one of the four largest                                                                  that real estate prices have been holding
proposed solar facilities in the U.S. Norris’               Anne Lloyd-Jones, CRE      Suzanne R. Mellen, CRE   steady while declines have been relatively
firm previously appraised the land underly-                 CREs Benjamin E. Barnett, Platinum                  few.
ing another of the state’s largest proposed                 Advisors, LLC, Dallas; Arnie Tesh, senior
solar facilities.                                           vice president, FTI Consulting, Inc.,               Monger Co-Authors
                                                            Washington, D.C.; Anne Lloyd-Jones, senior
                                                            vice president, HVS Global Hospitality              Article in Midwest
Souza Speaks                                                Services, Mineola, N.Y.; and Suzanne R.             Real Estate News
at RICS Event                                               Mellen, managing director, HVS, San                                 An article co-authored by
                 Larry Souza, CRE, FRICS,                   Francisco, plan to speak as a panel at VAL-                         CRE Timothy J. Monger,
                 principal, real estate and                 CON 2010 in Las Vegas in February. The                              senior vice president,
                 financial economist/broker,                panel will discuss hotels, gaming and mall                          Colliers Turley Martin
                 Johnson Souza Group, Inc.,                 economics. VALCON is a joint arrangement                            Tucker, Indianapolis, and
                 San Francisco, addressed a                 by the University of Texas School of Law                            colleague Kathleen Culp,
                 group at a recent RICS                     Continuing Legal Education and the                                  recently was published in
                 “Brown Bag” event in the                   American Bankruptcy Institute. This marks           Midwest Real Estate News. The article, enti-
Bay Area. The program focused on the most                   Barnett’s seventh year as a planner and             tled “Meeting the Challenges of Corporate
current look at national, state and local                   speaker at the event.                               Real Estate, Expansion,” discussed the
macroeconomic, capital and commercial real                                                                      importance of understanding the client’s
estate market indicators. Souza spoke on a                  Deal’s Opinion Published                            needs, finding the right location, and identi-
variety of topics including local commercial                                                                    fying and analyzing potential incentives.
real estate market conditions, the business                 in Houston Chronicle
and real estate cycle, transactions and mort-                               In September, the Houston
gage volumes, and strategies to manage into                                 Chronicle published an opin-        Griswold Pens New Book
the growth phase.                                                           ion on proposed Texas legis-                        CRE Robert Griswold,
                                                                            lation written by Matthew C.                        president, Griswold Real
                                                                            Deal, CRE, of Deal Sikes &                          Estate Management, Inc.,
                                                                            Associates in Houston. Deal                         San Diego, recently complet-


                2010
                                           M AY 2 3 - 2 6




                                                                            wrote that the proposed                             ed his newest book entitled
                                                            legislation, which would tighten the reins on                       Property Management Kit for
                                                            the government’s ability to acquire private                         Dummies, published by John


  Seattle
     CRE MIDYEAR MEETINGS
                                                            property for public use upon payment of just
                                                            compensation, should be supported. In
                                                            November, voters approved this proposition
                                                            in the statewide election. Deal’s company,
                                                                                                                Wiley & Sons in late 2008. The book is com-
                                                                                                                pletely rewritten from the first edition
                                                                                                                (which sold more than 100,000 copies), and
                                                                                                                includes a CD with all state laws and nearly
                                                            formed earlier this year, is a real estate          100 forms. Griswold also has revised his
                                                            valuation and counseling firm that provides         best-selling book Real Estate Investing for
                                                            acquisition and counseling solutions for            Dummies, co-authored with Eric Tyson,
                                                            public and private sector clients nationwide.       which was published in early 2009.


 8                                                                                                                             T H E    C O U N S E L O R
Member News continued


Gelbtuch Counsels                                 Kennedy Address Business                        Weinberg Wins
Kenyan School of                                  Groups on MBA Programs                          AUREO Award
Monetary Studies                                                  Loren S. Kennedy, CRE,                            Susan Carlson Weinberg,
                Howard Gelbtuch, CRE,                             principal, Kennedy Advisors,                      CRE, director of real estate
                Greenwich Realty Advisors,                        LLC, Raleigh, N.C., has been                      for the University of
                Inc., New York City, recently                     addressing business groups                        Minnesota, recently received
                spent nearly four weeks in                        in the Research Triangle area                     the first annual Weinberg
                Nairobi, Kenya, working with                      about “What’s Missing in our                      Award at the Association of
                the Central Bank of Kenya                         M.B.A. Programs?” Speaking                        University Officials’
                and the Ministry of Finance       recently to three area groups (the National     (AUREO) 2009 annual meeting and confer-
evaluating and negotiating bids to expand,        Association of Corporate Directors, the         ence in Montreal. The award, named for
rehabilitate, upgrade and modernize the 50-       Association for Corporate Growth, and the       Weinberg, recognizes individuals for their
acre campus of the Kenya School of                Expense Reduction Analysts), Kennedy says       significant lifetime career contributions to
Monetary Studies. The project was under-          that while most M.B.A. programs across the      the profession of higher education in real
taken on behalf of the International Real         country cover a broad scope of finance,         estate and for advancing the professional
Property Foundation.                              accounting and tax issues, most fall short in   development of the real estate function with-
                                                  discussing the implications of public finance   in higher education. Weinberg is one of the
The CRE Foundation recently awarded a             and incentives that would favorably impact      founding members of AUREO and has
$20,000 grant to fund the project’s third         many major corporate decisions. Kennedy         served twice as its president.
phase, which Gelbtuch will be overseeing.         says more M.B.A. programs should address
                                                  economic development statutes that are
                                                                                                  Wilkes Elected
Buhn’s Firm Honored                               largely targeted at private sector companies
                                                  contemplating capital investments and hir-      2010 Chair of The
                  CRE Jacqueline Buhn’s firm,
                  Athenian Properties LLC in
                                                  ing spurts.                                     Appraisal Foundation
                  Philadelphia, has been                                                                          David Wilkes, Esq., CRE,
                  named one of the 100 fastest-   Prouty Chairs 2009                                              FRICS, partner, Huff Wilkes
                  growing privately held com-     Tucson Airport Authority                                        LLP, Tarrytown, N.Y., has
                  panies in the Philadelphia                                                                      been elected 2010 chairman
                  region. The distinction,                        Timothy J. Prouty, CRE,                         of The Appraisal Foundation,
called the The Philadelphia 100®, is given by                     managing director, CB                           based in Washington, D.C.
the Entrepreneurs’ Forum of Greater                               Richard Ellis Inc., Tucson,                     The Appraisal Foundation,
Philadelphia, the Philadelphia Business                           Ariz., assumed the chair-       through its Appraisal Standards Board, pro-
Journal and the Wharton Small Business                            manship of the Tucson           duces the Uniform Standards of Professional
Development Center in recognition of the                          Airport Authority (TAA) ear-    Appraisal Practice (USPAP), and is author-
area’s private companies with the largest                         lier this year. TAA is a non-   ized by Congress as the source of appraisal
growth in sales during the most recent two        profit organization comprised of 115 resi-      standards and appraiser qualifications. In
years. Buhn’s real estate consulting firm spe-    dents of Pima County, Ariz., and manages        2009, Wilkes headed a special task force that
cializes in property management, redevelop-       the operations of Tucson International          approved a historic new Appraisal Practices
ment and construction management.                 Airport and general aviation airport, Ryan      Board that will provide appraisers and state
                                                  Field. Prouty was named to the Authority’s      regulators nationwide with needed guidance
“Athenian is particularly proud to be on this     board of directors in 2001. His term as
list during a period when our core industry,                                                      on recognized methods and techniques on a
                                                  chairman is for one year.                       range of valuation issues.
real estate, is in a downturn,” said Buhn.
“The company’s success is due to our public-                                                                      please turn to the next page

interest approach and our talented people,
who combine bricks-and-mortar under-
standing with financial acumen.”
                                                                                        Visit the CRE “Members Only” pages at
                                                                                        www.cre.org to access an electronic spread-
                                                                                        sheet that includes the complete mailing
                                                                                        and email address for each of the newest
                                                                                        members of The Counselors of Real Estate.




 W I N T E R     2 0 0 9 / 2 0 1 0                                                                                                            9
Member News continued                                      Hentschel and Kaganova                            Nahigian Addresses
                                                           Address Media in Serbia                           Two Conferences
Glanville Addresses New                                                                                                       Rob Nahigian, CRE, FRICS,
                                                                                                                              SIOR, principal, Auburndale
PERE Real Estate Forum                                                                                                        Realty Company, Newton,
                 Brian Glanville, CRE, MAI,                                                                                   Mass., recently spoke at the
                 FRICS, managing director,                                                                                    Massachusetts Association of
                 Integra Realty Resources,                                                                                    Realtor’s State Convention
                 Portland, Ore., was part of a                                                                                and at the national fall con-
                 panel that addressed partici-             CREs John Hentschel, president, Hentschel         vention of the Society of Industrial and
                 pants at the recent, first-ever           Real Estate Services, Abingdon, Md., and          Office Realtors in Toronto (SIOR). At the
                 PERE Real Estate CFOs                     Olga Kaganova, senior research associate,         Realtors State Convention, Nahigian spoke
Forum, held in New York City. Glanville’s                  The Urban Institute, Washington, D.C.,            on commercial real estate basics and com-
panel discussed valuation issues in dis-                   recently addressed media members during a         mercial leasing. At the SIOR convention, he
tressed markets, including public versus pri-              conference in Belgrade, Serbia, entitled          offered an educational session that dealt
vate valuation, best practices in valuation,               “Construction Land Management in Serbia.”         with concepts of wealth building, asset allo-
and the challenges of assessing value when                 Hentschel spoke about creating national           cation, types of developers, pro formas, soft
there are no public market comparables. The                wealth through mutual cooperation between         and hard costs, and financial analysis.
Forum is a new, collaborative peer-to-peer                 the Ministry of Defense and Municipalities
event for chief financial officers and mem-                to increase the value of and attract private
bers of the finance, compliance, operational               redevelopment investment to surplus mili-          Pasquarella and
and capital markets arenas.                                tary properties. Kaganova discussed the            Hanson Present
                                                           challenges of establishing a strategic frame-
                                                           work for managing and deploying govern-
                                                                                                              at ACREL Meeting
Cannon Addresses
                                                           ment property assets in Serbia. The event
Attorneys at Conference                                    was sponsored by the U.S. Agency for
in Miami                                                   International Development.
                 Michael Y. Cannon, CRE,
                 executive director, Integra               MacCrate Starts Blog
                 Realty Resources, Miami,
                 recently addressed attorneys              James R. MacCrate, CRE, MacCrate
                                                           Associates, Oyster Bay, N.Y., has                  2010 CRE Chair Art Pasquarella and
                 who attended the 22nd annu-
                                                           started a new blog on retail trends                2008 CRE Chair Richard Hanson
                 al Ralph E. Boyer Institute on
                                                           and department store rents.                        addressed this year’s national ACREL
                 Real Property and
                                                                                                              meeting, held recently in Washington,
Condominium Law and Cluster Development,                   To read MacCrate’s blog, visit:
                                                           http://realestateevaluation.wordpress.com/         D.C. The presentations mark the second
a conference sponsored by the University of
                                                           2009/09/22/retail-stores-rents/                    year that Counselors have participated in
Miami School of Law. Cannon’s presentation,
                                                                                                              an ACREL meeting since the groups’ for-
“The Real Estate Market—A Brave New
                                                                                                              mal relationship was established in 2008.
World: Reality vs. Recovery,” included a pro-
file of Greater Miami; observed economic                                                                      Speaking from his perspective as a pri-
trends, including latest overall statistics in
                                                           Levine Visits China                                vate equity real estate fund manager,
housing, rental apartments, office, retail,                                Mark Lee Levine, CRE,              Pasquarella discussed the current state
industrial and hotel sectors of the market; and                            professor, director, chair         of the real estate markets, and specifical-
a commentary about who and what caused                                     holder, University of Denver,      ly, the liquidity pressures that the econo-
the financial crisis and forecasts.                                        completed his 12th trip to         my is exerting on lenders and equity
                                                                           China earlier this year where      investors. He also reviewed the advan-
                                                                           he observed some of the            tages and disadvantages of historical



               2010
                                                                           newest training programs in        methods for recapitalizing real estate,
                                          M AY 2 3 - 2 6




                                                           China for real estate education related to         and evolving alternatives being pursued
                                                           valuation work. Levine also met with offi-         in today’s environment.


  Seattle
                                                           cials who are involved in Chinese financial        Hanson spoke on two topics: the state of
                                                           markets and are connected with real estate         the residential markets and the beginning
                                                           projects. Levine currently is visiting parts of    of the recovery based on growth in sales
                                                           Asia with graduate students and other real         of both new and existing homes during
   CRE MIDYEAR MEETINGS                                    estate professionals.                              the past several months, and on the bank-
                                                                                                              ing situation at both the construction
                                                                                                              lending and home mortgage levels.


 10                                                                                                                         T H E    C O U N S E L O R
Member News continued                            Moody Active on
                                                 Speaker Circuit                                    Flynn Honored by CRB
                                                                                                                    Norman D. Flynn, CRE,
Helsel Honored                                                   Von W. Moody, III, CRE,                            CRB, CIPS, GRI, presi-
with RCA Award                                                   senior vice president,                             dent, Norman D. Flynn
                                                                 Corporate Real Estate,                             Associates, Madison,
                 James L. Helsel, Jr., CRE,                      Wachovia Corporation,                              Wisc., recently was
                 CCIM, CPM, CRB, GRI,
                 SIOR, principal, RSR                            Denver, N.C., has addressed                        selected by the Council
                                                                 various area organizations                         of Real Estate
                 Realtors, LLC, Lemoyne, Pa.,
                                                                 recently, speaking on the          Brokerage Managers (CRB) as its 2009
                 recently was honored by the                                                        inductee into the Hall of Leaders. The
                 REALTORS® Commercial            topics of corporate real estate, distressed
                                                 property, and valuation and tax assessment         prestigious honor is given annually to
                 Alliance (RCA) with a nation-                                                      CRB designees whose significant con-
al award. The award acknowledges members         trends. The groups and events have includ-
                                                                                                    tributions continue to shape and influ-
of the National Association of REALTORS®         ed: the International Right of Way
                                                                                                    ence the real estate industry locally
and its Institute Affiliates who received an     Association Regional Conference; the               and nationally.
award from their state or local REALTOR®         Lincoln County Shoreline Organization; the
commercial group for their professional          CCIM Institute Carolinas Meetings; the ULI/        Flynn currently serves as president
excellence. Helsel was awarded the 2008                                                             and CEO of the International Real
                                                 University of North Carolina-Charlotte
                                                                                                    Property Foundation (IRPF) of the
Distinguished Service Award by the Greater       “Distressed Real Estate” seminar; and the          National Association of REALTORS®
Harrisburg Association of REALTORS®.             GVA Worldwide Conference.                          (NAR), and is a past president of NAR
                                                                                                    (1990). During his more than 30 years
Mazirow Speaks at                                Riggs Quoted in                                    of experience as a practicing real
California Conference                            BusinessWeek.com
                                                                                                    estate professional in development,
                                                                                                    commercial and residential real estate
                 Arthur Mazirow Esq., CRE,                                                          in the U.S., Flynn has also served
                 real estate arbitrator,                          Kenneth Riggs, CRE,
                                                                  president, CEO, Real Estate       international clients, bringing his
                 Mazirow Real Estate                                                                expertise to countries including the
                 Arbitrations, Los Angeles,                       Research Corporation,
                                                                                                    former Soviet Union. Since 1992, Flynn
                 recently addressed the                           Chicago, was quoted in the
                                                                                                    has served as chairman, president or
                 General Real Estate                              November 5 cover page arti-       CEO of IRPF.
                 Subsection of the Los                            cle in BusinessWeek.com on
                                                                  “Why This Real Estate Bust        In presenting the honor, Ginny Shipe,
Angeles County Bar Association on drafting
                                                                                                    chief executive officer of CRB, noted
arbitration clauses for real estate leases and   is Different.” The article looked at possible
                                                                                                    Flynn’s personal achievements,
purchase and sales contracts. Illustrating the   root causes of the real estate bust, including     adding, “Norm has a long and consis-
pitfalls of preparing these documents in a       unrealistic assumptions, layers of investors,      tent history of volunteerism in the
presentation entitled “The Perils of Pauline     sky-high prices and possible fraud as rea-         industry…[he] continues to give of his
and Paul,” Mazirow covered topics ranging        sons. Riggs said, “The market won't fully          time and talent to expand the reach,
from the advantages/disadvantages of             recover until 2020,” and in cases where “val-      impact and relevancy of the profes-
arbitration to baseball arbitration to party-    ues were over the top...maybe never.”              sion—especially abroad.”
appointed arbitrators to the role of the
transactional real estate lawyer.                                please turn to the next page



  Winius Wins Major Award from Lambda Alpha International
                   Walter Winius Jr., CRE, managing director, Integra     Additionally, Winius has worked on various international land
                   Winius Realty Analysts, Phoenix, recently was hon-     valuation processes in the emerging real estate markets in
                   ored in Chicago by Lambda Alpha International          Central and Eastern Europe, including Ukraine, Poland, Czech
                   with an International Fellow Award. The award          Republic, Macedonia, Bulgaria, Romania, Hungary and
                   was in recognition of his distinguished career and     Slovakia. He assesses all classes of real property, including
                   deep knowledge in the areas of national and inter-     resort, commercial, industrial, special purpose and agricultural.
                   national land economics and valuation. The desig-      He specializes in community development, litigation support
  nation is given to individuals for their outstanding achievements       and bankruptcy reorganization and liquidation.
  in the field of land economics and for contributions to the
  advancement of Lambda Alpha International’s goals, through              Winius was one of the founding members of the Lambda
  esteemed leadership and foresight.                                      Alpha International-Phoenix Chapter and has served as its
  Winius has owned and led Integra Winius Realty Analysts, Inc. in        president. He also has served as national president of the
  Phoenix for more than 50 years. His work for hundreds of                Appraisal Institute and has been active on several Urban Land
  Arizona clients has involved real estate appraisals, market identi-     Institute committees. Currently, he is president of the Council
  fication and analysis, demographic trend analysis, economic             for Design Excellence for the School of Architecture at
  trend analysis, absorption rates, project feasibility and land use      Arizona State University.
  mix recommendations and valuation studies.


 W I N T E R     2 0 0 9 / 2 0 1 0                                                                                                        11
Member News continued                                    Utter Published in
                                                         Denver Business Journal
Liljedahl Addresses                                                       Marilee A. Utter, CRE, pres-
                                                                                                            Shapiro Moves Firm
                                                                          ident, Citiventure Associates,
Women’s Construction                                                      Denver, recently wrote an                         Charles A. Shapiro, CRE,
Group                                                                     opinion that was published                        has moved his firm, The
                Richard C. Liljedahl, CRE,                                by the Denver Business                            StageOne Collaborative, LLC,
                Net Lease Capital Advisors,                               Journal. In it, Utter discussed                   to Mason, Ohio, near
                Farmington, Conn., recently                               the makings of successful                         Cincinnati, but will maintain
                spoke to a local chapter of              urban/suburban centers, saying that                                his presence in Armonk, N.Y.
                Professional Women in                    research shows that “…the healthiest, most                         Shapiro specializes in large-
                Construction in Hartford,                economically competitive areas are com-            scale multi-disciplinary assignments, pub-
                Conn., about available                   prised of a series of connected, viable, walk-     lic/private development, and strategic plan-
sources of funding for real estate in the                able centers,” adding that when such centers       ning for corporations and public agencies. In
Hartford-area market. Liljedahl said that                are linked to transit and roads, property val-     2005/06 Shapiro guided the team of CREs
because Hartford is a smaller market, as                 ues rise 40–200 percent. Utter urged the           that prepared strategic facilities plan compo-
compared to a major metropolitan city like               Denver business and real estate community          nents for The School District of
New York, “deals” are smaller, and capital is            to focus on making the city’s job centers          Philadelphia.
easier to obtain.                                        mixed-use, walkable and connected to               “In addition to continuing to support clients
                                                         Denver’s FasTracks (rail) initiative.              in the Northeast, I look forward to the next
                                                                                                            chapter of my counseling career for clients
Hedden and Powell Lead                                                                                      throughout the Midwest,” said Shapiro.
National Teleconference                                  Çelen Addresses
                                                                                                            “Whether consolidating corporate facilities
                                                         European Organizations                             or redeploying those of public agencies, I
                                                                         Güniz Çelen, CRE, CEO,             believe the current pause in the marketplace
                                                                         chairperson, Çelen Corporate       offers great opportunity to charge our bat-
                                                                         Property Valuation &               teries through rational planning.”
                                                                         Counseling Inc., Istanbul,
                                                                         Turkey, recently spoke at
                                                                         Expo Real, Munich, about           Louargand Appointed
CREs Michael P. Hedden (left), managing                                  the recent valuation and real      Co-Director of Real Estate
director, American Appraisal Associates,                 estate market environment of Turkey. She           Program at University
Inc., New York City; and George W. Powell,               also spoke at the Investment Locations
                                                         Forum on Europe and the Middle East
                                                                                                            of Connecticut
Jr., Esq. (right), attorney, Duane Morris LLP,
Miami, recently led a national teleconference            on real estate project development and                              Marc Louargand, CRE,
on the topic of temporary construction and               financing, and geographical diversification.                        principal, Saltash Partners
preservation easements. Sponsored by                                                                                         LLC, West Hartford,
Lorman Education Services, the conference                                                                                    Connecticut, has been
focused on content presented by Hedden                                                                                       appointed co-director of the
and Powell with the goal of educating
property owners and attorneys about how,
                                                          Outside theLines                                                   Center for Real Estate and
                                                                                                                             Urban Economic Studies in
within the context of eminent domain                       CREs not only are successful in their            the School of Business at the University of
takings, to value state and local easements to             real estate counseling careers, but also         Connecticut. In this role, he will focus on
ensure they are receiving just compensation.               are individuals who understand the               outreach and continue to build on the
                                                           importance and meaning of a full life—           stature and presence of the Center, which
                                                           life that is supported and enhanced by           has been rated among the top 10 real estate
                                                           involvement in intellectual, artistic,           programs in the U.S. and number one for


               2010
                                        M AY 2 3 - 2 6




                                                           philanthropic and physical pursuits outside
                                                                                                            property research. Prior to co-founding
                                                           the realm of real estate. The Counselor’s
                                                           Outside the Lines column features the
                                                                                                            Cornerstone Real Estate Advisers LLC, from
                                                                                                            which he is retired, he served as a professor


  Seattle
                                                           activities of such CREs, further demon-
                                                           strating the extraordinary nature of the         of real estate and finance at California State
                                                           CRE membership. To share your story in           University at Northridge, University of
                                                           The Counselor, contact Carol Scherf at           Massachusetts and MIT.
  CRE MIDYEAR MEETINGS                                     cscherf@cre.org or (312) 329-8429.




 12                                                                                                                        T H E    C O U N S E L O R
Wiebe Forms                                        Johnson Takes on                                Owen Engaged in
New Company                                        New Assignment and                              Pro Bono Projects
                  William E. Wiebe, CRE,           Receives Honors                                                  William Owen, CRE, presi-
                  Anchor Properties,                                Paul G. Johnson, CRE, of                        dent, CEO, Real Estate
                  Cincinnati, has formed a new                      The Paul G. Johnson                             Research Consultants
                  company called The Wiebe                          Company, Inc., Phoenix, is                      (RERC), Inc., Orlando, Fla.,
                  Health Care Group, LLC, in                        adding to his ongoing valua-                    currently is working on two
                  Cincinnati. The new firm                          tion and consulting services                    pro bono projects that
                  assists physicians and hospi-                     by assuming a new role as                       address innovative economic
tals with their real estate needs. For the past                     the valuation advisor to       development programs in central Florida.
three years, Wiebe has been a part of the          Realty Resolution Advisors, a Phoenix-based     One involves determining the economic and
strategic planning for Cincinnati Hospital         group of experienced real estate profession-    fiscal benefits of attracting a major target
Systems, working on the site selection and         als specializing in full service project and    industry prospect to Seminole County; the
development of a $250 million suburban-            portfolio assessment, asset management,         second applies the economic benefits model
based hospital that is scheduled to be deliv-      portfolio triage, and strategic advice.         to a pilot program for “economic garden-
ered in 2014. Wiebe also recently authored                                                         ing,” or nurturing high growth, second-
several articles on Leed®-certified medical        Also, Johnson recently was recognized for       stage entrepreneurial companies throughout
facilities, and another on the coming changes      his 25 years of service and as a founding       the state.
in health care facilities as a result of changes   member of both the Dean’s Council of 100
                                                   and the Economics Club of Phoenix at            The firm also has been retained by the city
in the health care environment.                                                                    of Minneapolis to conduct a market assess-
                                                   Arizona State University’s W.P. Carey School
                                                   of Business.                                    ment and economic development analysis
Kuiper Forms Real Estate                                                                           for a Life Sciences corridor home to 19
                                                                                                   health and medical institutions and 61
Consultancy Firm                                                                                   research and clinical labs.
                Robert J. Kuiper, CRE,                                                             RERC Orlando recently completed an eco-
                FRICS, CPM, recently formed                                                        nomic impact analysis of the University of
                an international real estate                                                       Central Florida-operated technology incuba-
                consultancy firm, called           DeSantis and Shepard                            tor system for the university’s office of
                IntReCons, located in The                                                          Research and Commercialization. Among
                Netherlands. Kuiper’s new          Complete Pro Bono Work
                                                                                                   the key findings: companies within the incu-
                business will provide strategic,   for St. Louis Archdiocese                       bator and graduated companies have an
tactical and operational real estate advice, as                                                    annual impact of $200 million and create at
well as interim real estate portfolio and asset                                                    least one additional job in the region for
management. Previously, he worked for                                                              each job nurtured by the incubators.
Shell in real estate investments and manage-
ment, and in corporate real estate.
                                                                                                   Editor’s Note: In the last issue of The Counselor,
                                                                                                   we noted Abel E. Berland, CRE Emeritus,
Kafes Joins NPV Advisors                                                                           as having served as CRE president in 1980.
                                                   St. Louis area CREs Dennis DeSantis, senior     Berland served as CRE president in 1970.
James C. Kafes, CRE, has joined NPV
                                                   director, Gateway Commercial, and Dick
Advisors as a managing director, and will
                                                   Shepard, principal, Real Estate Strategies,
be opening the firm’s new office in New
                                                   recently completed two pro bono assign-
York City. Previously, Kafes served for ten


                                                                                                                   2010
                                                   ments for the St. Louis Archdiocese. One                                                    M AY 2 3 - 2 6
years as a real estate consultant and invest-
                                                   assignment involved helping with the suc-
ment committee member at AEGON USA
                                                   cessful disposition of 28 parish properties,
Realty Advisors, Inc. in New York.
                                                   and another involved collaborating with an


 Send Your Member News
 We welcome your Member News
                                                   inner city Archdiocesan high school to
                                                   acquire and demolish 24 problematic apart-
                                                   ment buildings, with the goal of providing
                                                   land to expand its athletic fields and stabi-
                                                                                                     Seattle
                                                                                                      CRE MIDYEAR MEETINGS
 submissions for the next issue of The             lize its role as a community anchor. Both
 Counselor. Please send them to Managing           DeSantis and Shepard serve on the
 Editor Carol Scherf at cscherf@cre.org.
                                                   Properties and Financing Committee of the
                                                   St. Louis Archdiocese.




 W I N T E R      2 0 0 9 / 2 0 1 0                                                                                                                    13
 Chapter News

Midwest Chapter                                New England/Upstate                                2010 Chapter Chairs
Examines Public/Private                        New York Chapter
                                                                                                   CALIFORNIA (NORTHERN)
Opportunities                                  Hosts Receptions                                    James A. Gavin, CRE
                The Midwest Chapter recent-                   The New England/Upstate              CALIFORNIA (SOUTHERN)
                ly combined a lunch and                       New York Chapter recently            To Be Announced
                business meeting that cen-                    held two receptions in con-          CENTRAL/NORTHERN OHIO
                tered around a presentation                   junction with the local              Robert J. Weiler, Jr., CRE
                by CRE Stephen B.                             CoreNet Global chapter: one          CENTRAL/SOUTH TEXAS
                Friedman, CRE, president,                     at a new office building             Charles H. Noble, III, CRE
                S.B. Friedman & Company,                      called the National Grid,
                                                                                                   CINCINNATI/KENTUCKY
Chicago, on the topic of “Public/Private       designed with energy-saving components, in          Michael J. Dinn, CRE
Financing Opportunities Post Recovery Act.”    Waltham, Mass., and another at the new
                                                                                                   COLORADO
Friedman spoke of the opportunities for        headquarters of Blue Cross and Blue Shield
                                                                                                   Byron Koste, CRE
CREs created through the current economy       in Providence, R.I. Additionally, the CRE
                                               Chapter Board met in September to review            CONNECTICUT
and the federal Stimulus Program. Midwest                                                          Edward S. Hill, Esq., CRE
Chapter Chair Charles R. Nash, CRE,            the 2009 year and plan activities for 2010.
                                                                                                   DALLAS/FORT WORTH
Chicago, executive vice president,
Transwestern Commercial Services, moder-
                                               Oregon Chapter                                      J. Leslie Neugebauer, CRE

ated questions from the audience. The          Raises $1,600 for                                   DELAWARE VALLEY
                                                                                                   Jay L. White, CRE
luncheon was held at The DePaul Club at        the CRE Foundation                                  FLORIDA (SOUTHERN)/CARIBBEAN
DePaul University’s downtown campus in                          In an effort to seek new           Richard M. Langhorne, CRE
Chicago and was attended by nearly 30 CREs                      funding for The Counselors         GEORGIA
from Illinois, Wisconsin and Iowa.                              of Real Estate Foundation          Monica B. Hagewood, CRE
                                                                from a wider base of contrib-      HAWAII
                                                                utors, the Oregon Chapter          Christine H.H. Camp, CRE
Georgia Chapter                                                 has raised $1,600 from its         HOUSTON/GULF COAST
Launches Newsletter                                             membership. Oregon Chapter         Todd A. Mason, CRE
                The Georgia Chapter recently   Treasurer, Robert M. Dant, CRE, managing            MIDWEST
                launched its own newsletter    member, designated broker, Dant Real Estate         David R. Walden, CRE
                called The Peach, that high-   Services, LLC, Portland, said the chapter’s
                                                                                                   MINNESOTA
                                               goal is obtain “100 percent member involve-         Mary C. Bujold, CRE
                lighted chapter activities,
                                               ment” in the effort. The CRE Foundation
                member profiles, chapter                                                           NEW ENGLAND/UPSTATE NEW YORK
                                               (formerly the James E. Gibbons Educational          Robert J. Nahigian, CRE
                financial news and upcom-      Development Trust Fund) is seeking to
                ing events, among other        expand its group of contributors in order to        NEW JERSEY
items. The front page story detailed a chap-   fund a wider variety of real estate projects.
                                                                                                   Paul W. Korch, CRE
ter meeting held during the summer which                                                           NEW YORK METROPOLITAN
featured guest speaker Phil Thompson, part-    Pacific Northwest Chapter                           David E. Fields, CRE
ner Duane Morris, LLP, who spoke on “The                                                           NORTH/SOUTH CAROLINA
Federal Response to the Economic Crisis:
                                               Counsels on Historic                                Jody Odom, CRE
Impact on Commercial Real Estate Lending       Seattle Building                                    OREGON
and Industry.” Thompson served as special                       The Pacific Northwest CRE          Ken J. Griggs, CRE
counsel to the Federal Savings and Loan                         chapter recently completed an      PACIFIC NORTHWEST
Insurance Corporation and Resolution Trust                      assessment of the practical        Steve Price, CRE
Fund from 1989–1991, and was responsible                        and functional uses for the        SAN DIEGO
for the takeover and liquidation of more                        second and third floors of the     Robert S. Griswold, CRE
than 40 banks in the Mid-Atlantic and                           Rehabilitation of Seattle's        SOUTHWEST
southeast regions of the U.S.                                   Historic King Street Railroad      To Be Announced
                                               Station. Three chapter members toured the           UTAH
                                               property and evaluated the location and             To Be Announced
                                               attributes of King Street Station. After consid-
                                               ering the feasibility and marketability of a
                                               range of different occupancies, a joint report
                                               was circulated among the participants, and a
                                               final report was provided to the client.

 14                                                                                                             T H E     C O U N S E L O R
From Seat 9F                                                                      BY NOAH SHLAES, CRE




What it means...                                                                                  single-purpose, clearly defined group, this
                                                                                                  would be easy, but we are not—we are, like
NEW ORLEANS HAS ALWAYS BEEN thought-pro-                                                          our host city, something wonderful that came
voking, but it is more so after Katrina. Four                                                     to be. The struggle in writing and defining a
years into the recovery, progress varies                                                          plan reflects that every Counselor gives a dif-
depending on where one looks. The city is a                                                       ferent answer to the question “what is this
mix of familiar sights, new construction,                                                         organization?”
abandoned neighborhoods, and new initia-          “The struggle in writing and defining           Counselors range across professions, career
tives. The French Quarter, part of the origi-      a plan reflects that every Counselor           stages and geography. Some work for mono-
nal high ground, seems unchanged, at least            gives a different answer to the             lithic publicly traded companies, others from
when looking at paintings in Jackson              question “what is this organization?”
                                                                                                  a home office. Our clients and our prospec-
Square. But New Orleanians have always                                                            tive membership hold very different views of
incorporated sadness in their art, so this                                                        the organization and the credential. The
                                                So, a glance at a painting of tourist icons—a
most recent tragedy has added a poignant                                                          Counselor “experience” can mean anything
                                                cheerful streetcar and a trumpet player—
beauty to the mix. Now you can miss New                                                           from attending (or leading) an authoritative
                                                gave the impression of typical Jackson Square
Orleans while visiting it.                                                                        panel on markets to an impromptu trumpet
                                                fare. Painted in the streetcar were three mon-
                                                                                                  solo on Bourbon Street to the heated philo-
                                                keys, seeing, hearing and speaking no evil. It
                                                                                                  sophical debate of strategic planning. We are
                                                took a minute to recognize the medium—
                                                                                                  unlikely to agree on what unites us, but we
                                                Artist John Perret had painted a door sal-
                                                                                                  agree that we are united. And for that, and for
                                                vaged from flood debris, retaining the spray-
                                                                                                  the too-slow but evident recovery of a favorite
                                                painted “X” in the window at its top. Rescue
                                                                                                  city, I am thankful.
                                                workers going house to house had painted
                                                these markers to track inspection, condition      Noah Shlaes is managing director, strategy
                                                and the count of dead found inside. In four       consulting, Grubb & Ellis, Chicago.
                                                years, the “X” has become a tourist icon as
                                                well, along with the three monkeys.
                                                It’s difficult to find agreement as to what, or
                                                even whether, to rebuild. The city is differ-
                                                ent things to different people—a home, a
                                                playground, a museum, an oil port, a cul-
                                                ture. Absent the task of recovery, the ques-
                                                tion “what is this city?” was an interesting
                                                hypothetical discussion. Faced with hard
                                                decisions of what to repair, replace, abandon
                                                or omit, the parties discovered that they
                                                weren’t talking about the same city at all.
                                                Questions of housing, growth, infrastruc-
                                                ture, transit, history and education all lead
                                                to different solutions, often contradictory.
                                                So it is, when we pause to question some-
                                                thing wonderful that came to be without the
                                                benefit of an orderly plan.
                                                Another important exercise occurred at the
                                                October meeting of The Counselors. For at
                                                least the fourth time, our organization is
                                                developing a new strategic plan. Were we a




 W I N T E R     2 0 0 9 / 2 0 1 0                                                                                                           15
     T H E C O U N S E L O R S O F R E A L E S TAT E

     ANNUAL CONVENTION
     NEW ORLEANS, LOUISIANA
     TURNING IT AROUND
     MASTERING THE NEW URBAN REALITIES
     CREs who attended the 2009 CRE Annual Convention in New Orleans
     got a head start on what experts are saying about the current state
     of the economy, as well as inside knowledge on how to prepare for
     the unexpected–whether it be a “natural” or other form of disas-
     ter–in the community. Here are just some of the comments about the
     convention’s educational sessions from CREs who attended:

     “Up-to-date information about capital markets, regulatory
     issues and their impact on liquidity and pricing…”
     “Very intelligent…”
     “Very relevant to my practice…”
     “[It’s] unlikely that education at another conference
     would be as good.”


       The Counselors of Real Estate would like to thank the
       sponsors of the 2009 CRE Annual Convention:
       BPG Properties, Ltd.
       Annual Sponsor – Gold Level, and sponsor of Farewell Reception
       Real Estate Research Corporation (RERC)
       Annual Sponsor – Silver Level, and sponsor of Farewell Reception
       Pappalardo Consultants, Inc.
       Sponsor of Mardi Gras World Celebration Event
       Stirling Properties
       Sponsor of Mardi Gras World Celebration Event
       Meltzer Properties
       Sponsor of Cyber Café (CRE computer station located in the registration area)
       Integra Realty Resources
       Sponsor of Welcome Lunch
       Colliers Turley Martin Tucker
       Sponsor of registration area Hospitality
       Jones Lang LaSalle
       National Meeting Sponsor
       JEMB Realty and Busac Realty (Bailey Real Estate Group)
       Sponsor of the Legislative Update Breakfast Session and
       Hospitality for the General Sessions
       CB Richard Ellis                           See more convention photos online at
       National Meeting Sponsor                   the CRE Web site at www.cre.org/programs_
                                                  and_events/ac09/photo%20Gallery/index.html
                                                  .
16                                                               T H E     C O U N S E L O R
Eighteen real estate advisors were invited to membership in The Counselors of Real Estate at the 2009 CRE Annual Meeting in New
Orleans. Please take the time to extend your personal welcome to your new CRE colleagues. Sending your best wishes to these new
Counselors demonstrates one of the organization’s most important core values – its unmatched sense of community.




                                           First-Time Meeting Attendees
                                           Left to right: Bates McKee, CRE; Craig A. Werley, CRE; Susan R. Gwin, CRE; Reid C. Wilson, CRE;
                                           K.C. Conway, CRE; Julie S. Mebane, CRE; Martin Van Ardenne, CRE; Sydney L. Machat, CRE;
                                           Charles T. Brigden, CRE; Martha Heric, CRE; Larry A. Clendennen, CRE; Stephen Timothy Mallen,
                                           CRE; William T. Chandler, CRE; William C. Steffey, CRE; Kathleen Nylen, CRE
 W I N T E R   2 0 0 9 / 2 0 1 0                                                                                                         17
.ARMCHAIR DEVELOPMENT TOUR.

New Orleans from Destruction to Rebirth




Lewis W. Stirling, III, CRE    John A. Meltzer, CRE         Jean C. Felts, CRE,             Al Pappalardo, CRE          Allison Plyer
                                                            moderator

IN THIS ATYPICAL DEVELOPMENT TOUR,                    vacant, blighted buildings, affordable         Francisco with its earthquake risk; New York
Counselors were welcomed by local program             housing for low-income workers and the         with hurricane risk; and Boston and
chair Al Pappalardo, CRE, president,                  risk of flooding.                              Washington, D.C. with serious issues as the
Pappalardo Consultants, Inc., New Orleans,        CREs Lewis Stirling, III, executive vice           sea-level rises over the coming decades.
and treated to a sit-down, “armchair,” two-       president and partner, Stirling Properties,        Much can be learned from the local, state and
hour multi-media event that was a cus-            New Orleans and John Meltzer, president,           federal efforts post Katrina in addressing
tomized “before-and-after Katrina trip”           Meltzer Properties, Ouray, Colo. (formerly of      those issues.
through the Crescent City.                        New Orleans), described the actual deals that                     Reported by
                                                                                                                    Julie M. McIntosh, CRE,
Jean Felts, CRE, principal, Jean C. Felts &       are getting done, as well as the rebuilding that                  chief investment officer,
Company, New Orleans, explained how the           is taking place with their own properties and                     The Integral Group, LLC,
City of New Orleans grew from 1878–2005,                                                                            Atlanta
                                                  the challenges they faced following the crisis.
initially building on high ground and then        The session concluded with a reminder that
spreading out into the lowlands, encouraged       there are many areas in the United States that
and protected by the federal levees and flood     are susceptible to a natural disaster: San
insurance. But on Aug. 29, 2005, the levees
were breached, an estimated 1,800 people lost
their lives, and $75 billion in property dam-
age was wrought by Hurricane Katrina. The
audience was riveted by the awesome display
of devastation wrought by this catastrophic
event. The series of photos concluded with
those showing the exact viewpoints of prop-
erty before the hurricane, followed by others
showing the transformation of buildings as
they exist today.
Allison Plyer, deputy director, Greater New
Orleans Community Data Center, shared cur-
rent information from the New Orleans
Index, a joint collaboration of the Data
Center and the Brookings Institution, which
relies on more than fifty indicators to exam-
ine the recovery progress in the New Orleans
metropolitan area. Key points were:
   The city is doing relatively well during the
   recession due, in part, to its industry
   composition;
   Ongoing rebuilding activities are attract-
   ing people, jobs and investments;
   Significant challenges remain, including




 18                                                                                                                 T H E    C O U N S E L O R
. B R E A K FA S T S E S S I O N .

Legislative Update: Seeking Capital Liquidity




Clifton E. (Chip) Rodgers, Jr.


CLIFTON E. (CHIP) RODGERS, JR. senior vice
president of the Real Estate Roundtable
(RER), Washington, D.C., provided a
thoughtful review of the key challenges fac-
ing the commercial real estate capital mar-
kets and the status of key government pro-
grams designed to help. He also outlined
RER’s Five-Point Plan for increasing liquidity.     Term Securities Lending Facility                 Establish federally sponsored credit facili-
The CMBS market, which peaked at $230               ABCP Money Market Fund Liquidity                 ty for originating new loans: adapt P-PIP
billion in new issuance in 2007, has seen no        Facility                                         structure; guaranty program based on
new private deals since early 2008. Many                                                             FDIC insurance model;
                                                    Commercial Paper Funding Facility
commercial mortgages are coming due—                                                                 Encourage foreign investment in U.S. real
$800 billion in commercial loans come due           Money Market Investing Funding Facility          estate—revise Foreign Investment in Real
in 2010 and 2012, and $1,800 billion in             Term Asset-Backed Securities Loan                Property Tax Act (FIRPTA) and ECI;
2012-plus. Hundreds of billions of dollars of       Facility (TALF)                                  Encourage banks and servicers to extend
equity are needed to refinance the commer-
                                                  Treasury Department                                performing loans;
cial mortgages. Foreign investment, which
peaked at $40 billion in 2007, dropped to            EESA authorized $700 billion for TARP           Reject new anti-real estate investment
$10 billion in 2008, and 2009 estimates are                                                          taxes (e.g., capital gains, like-kind
                                                     Capital Purchase Program (CPP)                  exchanges and proposed tax hike on part-
for further declines. As well, billions of dol-
lars in acquisition, construction and devel-         Public-Private Purchase Program                 nership “carried interest”).
opment loans in bank portfolios are coming           Home Affordable Modification Program         These ideas and many others including a GSE
due in the next three years.                                                                      for commercial real estate and an FDIC-like
                                                     Continued capital support to GSEs and
Substantially enhanced liquidity is needed,          MBS purchases                                securitization guarantee program are needed,
and the government has enacted many pro-                                                          along with political support to move the leg-
                                                  Many of these programs have been very suc-      islative agenda to assist the industry in
grams to address the problem:
                                                  cessful in helping the banking system overall   pulling out of its serious capital problems.
Federal Reserve Bank                              avert more serious problems, but the pro-
                                                  grams targeting commercial property market      This session was sponsored by JEMB Realty
   Term Discount Window Program                                                                   and Busac Realty (Bailey Real Estate Group).
                                                  liquidity have been slow to emerge and need
   Term Auction Facility                          additional support and refinement to address                    Reported by
                                                  the growing needs. RER is currently focused                     Scott Muldavin, CRE,
   Primary Dealer Credit Facility                                                                                 executive director,
                                                  on a five-point strategy as outlined below:                     Green Building Finance
   Transitional Credit Extensions                                                                                 Consortium,
                                                     Enhance and extend the Term Asset-                           San Rafael, Calif.
   Reciprocal Currency Arrangements
                                                     Backed Securities Loan Facility (TALF)
   Securities Lending                                program for CMBS;




 W I N T E R        2 0 0 9 / 2 0 1 0                                                                                                        19
.GENERAL SESSION.

Aftermath: The Effects of Displacement




                                                                                                    Gregory C.      Dr. Timothy P.     Al Pappalardo,
                                                                                                    Rigamer         Ryan               CRE

                                                                                                    The public school system was, in Dr. Ryan’s
                                                                                                    words, “…completely broken before Katrina,
                                                                                                    bureaucratic and corrupt,” with 36 percent of
                                                                                                    students unsatisfactory in minimum compe-
                                                                                                    tency in English and 48 percent unsatisfac-
                                                                                                    tory in mathematics at the 8th grade level.
                                                                                                    The high school dropout rate was more than
                                                                                                    50 percent. The state has taken over more
                                                                                                    than 89 percent of Orleans Parish public
                                                                                                    schools, with the University of New Orleans
                                                                                                    the manager of one of those institutions. The
                                                                                                    city now has the highest proportion of char-
MODERATED BY CRE Al Pappalardo, presi-            Pontchartrain, neighborhoods whose eleva-
                                                                                                    ter schools in the United States, because of
dent, Pappalardo Consultants, Inc., New           tions were five to nine feet below sea level.
                                                                                                    the dire conditions in public education.
Orleans, this educational session featured        So New Orleans’ most distinctive historical
two prominent speakers: Gregory C.                neighborhoods were preserved, but the areas       Ryan spoke optimistically about the
Rigamer, CEO of GCR and Associates, New           outside of the city and its poorer neighbor-      improvements under state management, but
Orleans; and Dr. Timothy P. Ryan,                 hoods were hit hardest.                           noted that concerns such as the role of the
Chancellor of the University of New Orleans.                                                        neighborhood school in an environment of
                                                  In early 2006, vast areas of metro New
                                                                                                    geographically dispersed charter schools
Rigamer’s management consulting firm has          Orleans were still depopulated, about 50 per-
                                                                                                    remain controversial. As so much of New
been heavily involved in amassing the             cent of the land area. Today, 30 percent of all
                                                                                                    Orleans housing stock remains abandoned,
detailed data of Katrina’s devastation. The       properties—some 60,000 homes—are still
                                                                                                    such issues are likely to remain unresolved
numbers describing the storm are stagger-         out of service. About 77 percent of the pre-
                                                                                                    for years.
ing. The hurricane represented an energy          storm population is back. The employment
event equivalent to four Hiroshima A-             count is down 29 percent, or about 80,000         In the question-and-answer session follow-
bombs—25 times the impact of Hurricane            jobs. Nevertheless, because of supply scarci-     ing the panel’s presentations, “transportable
Betsy (1965) and four times that of               ty, rents are high. New Orleans is dependent      lessons” were addressed. One idea was that
Hurricane Camille (1969), the largest storms      upon continuing public capital infusion to        the role of the federal government should be
to have hit New Orleans in earlier years. It      rebuild its infrastructure, while coping with     to facilitate the private sector in remediation
came as a 500-year rainfall event, and could      diminished public services and a persistent       efforts, rather than attempting to fix prob-
have been worse had the storm not been            shortage of private investment.                   lems under the centrally administered pro-
moving quickly. Though New Orleans was                                                              grams such as FEMA. Rigamer said he
                                                  Ryan spoke to educational issues, not only in
the major population center hit, the hurri-                                                         thought the recovery would be market-driv-
                                                  terms of New Orleans’ institutions of higher
cane had a 140-mile footprint, with a 30-foot                                                       en, but that this has not been the case.
                                                  education but the K-12 system. The
storm surge, which New Orleans was spared                                                           Public “incentives” appear to work only if
                                                  University of New Orleans, Tulane
due to its distance from the Gulf of Mexico.                                                        there is a basic level of private viability that
                                                  University, Loyola University, Southern
Coastal Mississippi, Biloxi in particular, bore                                                     public funds can leverage. Such opportuni-
                                                  University at New Orleans, and Xavier
the brunt of the sea surge.                                                                         ties, as yet, have been scarce in the after-
                                                  University give the city an impressive array
                                                                                                    math of Hurricane Katrina.
In New Orleans, the levees were breached          of undergraduate and graduate programs.
but did help protect the city from a huge         He noted that FEMA was a nightmare for                            Reported by
                                                                                                                    Hugh Kelly, CRE,
residual volume of potential water damage.        the colleges and universities, which were                         clinical associate professor
The “old city,” epitomized by the French          more effectively supported by other federal                       of real estate,
                                                                                                                    New York University,
Quarter, was built on relatively high ground      funding in the year after Katrina, in                             New York City
at three to seven feet above sea level and was    response to joint lobbying by the local col-
less affected than areas closer to Lake           leges and universities.




 20                                                                                                                 T H E     C O U N S E L O R
.GENERAL SESSION.

Navigating Unexpected Changes in Real Estate Portfolio Management
SPEAKER ROBERT SMITH LUPO, CEO, Lupo
Enterprises, New Orleans, opened with a dis-
cussion of the extensive damage done by
Katrina. With 11,000 homes under water by
4–10 feet, people and infrastructure were
compromised. Decisions needed to be
addressed including contact with the sur-
vivors, restoring basic services such as water,
                                                    Jean C. Felts, CRE,   R. Wayne Pugh, CRE   Logan H. Babin, Jr., Robert E. Smith Lupo Joseph S. Pappalardo,
sanitary and utilities. Without predetermined       moderator                                  CRE                                       J.D., CPM
plans, many were left to make decisions in cri-
sis without benefit of sufficient time and all of   up and running was key. He mentioned that             management and disaster plans to deal with
the information: what properties could be           entire oil platforms disappeared or were              current and future natural or terrorist disas-
saved; how to deal with zoning considera-           moved as much as a half-mile from their               ters. He used the term "recovery and discov-
tions; should some properties be rebuilt; and       original sites. Before Katrina, the average           ery" to deal with the many facets of the
how to rebuild given the fact that supplies,        price of a home was $150,000, and it quickly          rebuilding and healing process. He stressed
communications systems and electrical serv-         rose to over $170,000 as displaced citizens           the need for backup systems and controls
ices were unavailable for weeks on end.             and incoming relief workers sought housing            from office space, a safe house or offsite loca-
Simple issues such as where were the insur-         away from the flooded areas. More than                tion for records, computers, communication
ance adjusters, construction crews and disas-       25,000 newly displaced persons moved into             and storage of records such as insurance poli-
ter relief agencies to be housed became life        the area. Management of the neighborhood              cies and business details. Lastly, and certain-
and death issues. Dealing with all of these         housing stock was important as different tax          ly important, was the need to know how to
problems including personal problems caused         incentives were put in place to assist the area.      deal with the insurance adjusters and public
by Katrina gave new meaning to the consider-        A good portion of developable land in the city        adjusters necessary to get things back on
ations of managing real estate portfolios in a      was eliminated by the storm, creating a               track. Simple items such as locating policies
time of change and stress.                          scarcity of land throughout the area. From a          and companies, making appointments with
CRE Logan Babin, Jr., president, Logan H.           management point of view, Babin mentioned             the carrier and getting the right people to
Babin, Inc., Houma, La., discussed the com-         that land management and both fire and zon-           rebuild were important considerations in
munity of Houma, an inland city heavily             ing codes needed to be changed to reflect the         navigating unforeseen changes.
dependant upon the oil business and the             “tabula rasa” now in effect in New Orleans.           CRE Wayne Pugh, principal, R. Wayne Pugh
service industry. The massive interruption of       Joseph S. Pappalardo, J.D., CPM, president,           & Co., Baton Rouge, La., discussed Katrina’s
the flow of oil would have consequences to          Latter & Blum Property Management, Inc.,              effect on the appraisal world and considera-
the entire United States, and the need to get       New Orleans, discussed the need to develop            tions such as backup files, where to find space
                                                                                                          for his staff, and what approach to utilize
                                                                                                          given that the market approach was not appli-
                                                                                                          cable. Where were his databases, where were
                                                                                                          cap rates and what was the effect of Katrina
                                                                                                          on transit, health, education and social servic-
                                                                                                          es? Banks needed to exhibit flexibility, insur-
                                                                                                          ance companies needed compassion, and all
                                                                                                          were reminded that the human spirit pre-
                                                                                                          vailed and people tended to work together. In
                                                                                                          closing, the audience was reminded that this
                                                                                                          was not likely to be the last of natural or ter-
                                                                                                          rorist disasters, and we should all be mindful
                                                                                                          of the fact that any one of us on either coast
                                                                                                          could be subject to disaster and forced to deal
                                                                                                          with change at any moment.
                                                                                                                          Reported by
                                                                                                                          Andrew G. Bene, CRE, FRICS,
                                                                                                                          executive vice president,
                                                                                                                          Capital Markets,
                                                                                                                          MB Real Estate,
                                                                                                                          New York City




 W I N T E R      2 0 0 9 / 2 0 1 0                                                                                                                     21
 2008 Ballard Award(s) Presented
                 CRES MARC LOUARGAND,            in a Sustainable World.” Butters’ article
                 PH.D., 2009 associate editor    addressed the emerging legal implications of
                 of Real Estate Issues, co-      building, selling or representing a property as
                 director, Center for Real       having sustainable or green characteristics.
                 Estate and Urban Economic       Co-authors Pierce Jones, Ph.D., professor at
                 Studies, University of          the University of Florida, and Ujjval K.
 Ujjval Vyas,
                 Connecticut, Storrs, Conn.,     Vyas, Ph.D., J.D., principal, Alberti Group,
 Ph.D., J.D.     and Mary Bujold, 2010           Chicago, (not in attendance), each won for
                 associate editor of Real        their case study of a Florida residential
                 Estate Issues and president,                                                      (left to right): Frederick F. Butters, FAIA, Esq.,
                                                 development that was built as “sustainable”       Ballard Award winner; Marc Louargand, CRE,
                 Maxfield Research, Inc.,        housing. Their article, “Energy Performance       2009 associate editor of Real Estate Issues; and
                 Minneapolis, presented          in Residential Green Developments: A              Mary C. Bujold, CRE, 2010 associate editor of
                 three William S. Ballard                                                          Real Estate Issues
                                                 Florida Case Study,” examined data taken
                 awards to authors of two        from a sustainable residential development
                 articles that tied for the      that showed that Florida’s first ENERGY           The honor, bestowed annually, recognizes
                 winning vote.                   STAR® homes were more energy efficient            the author(s) whose work best exemplifies
 Pierce Jones,
 Ph.D.           Accepting the awards for all    than conventionally built homes, but not by       the high standards of content maintained in
                 of the winners was author       as much as they had been six years prior.         the organization's 33-year-old professional
 Frederick F. Butters, FAIA, Esq.,               The study showed the need for credible            journal, Real Estate Issues, published by The
 Comprehensive Legal Services for the Design     energy consumption data on which to build         Counselors of Real Estate. The award is
 and Construction Professional, Southfield,      practical policies. Both articles were pub-       named for the late William S. Ballard, CRE,
 Mich., who won for his article entitled         lished in the 2008 Special Focus “green”          and funding for the award is provided by
 “Greening the Standard of Care: Evolving        issue of Real Estate Issues.                      the William S. Ballard Scholarship Fund in
 Legal Standards of Practice for the Architect                                                     his memory.


.GENERAL SESSION.

The Markets React
AGAINST A BACKDROP of examples from New
Orleans, speakers at “The Markets React”
general session told Counselors to expect the
unexpected across all sectors following a
major local catastrophe.
Patrick J. Egan, CRE, executive vice presi-      Patrick J. Egan, CRE     James E. Maurin          Charles H. Peterson, CRE   Lewis W. Stirling, III,
dent and director, Commercial Sales and                                                                                       CRE, moderator

                                                 Internet the primary communications vehi-         resulting shortages of cooks, servers,
                                                 cle for management, staff and clients. As a       cashiers and clerks throughout the region as
                                                 result, the company could provide brokerage       workers flocked to the temporarily higher-
                                                 and management services remotely.                 paying food service jobs, abandoning their
                                                 Charles H. Peterson, CRE, executive vice          prior positions.
                                                 president and general manager of Corporate        James E. Maurin, chairman, Stirling
                                                 Realty, Inc., New Orleans, said that while        Properties, New Orleans, noted that follow-
                                                 many hotels in the city initially were not        ing Katrina, rebuilding the retail sector in
                                                 severely damaged by the hurricane, lack of        New Orleans would have been severely ham-
Leasing, Latter & Blum, New Orleans,             repair services and electricity in hot, humid     pered if not for government funding. And, as
recounted the challenges of operating the        conditions resulted in rampant mold growth,       residents were helped to other Louisiana
firm without basic services from utility com-    preventing the facilities from being restored.    cities such as Lafayette and Baton Rouge dur-
panies. How companies reacted following          Other surprising findings: hotels beyond the      ing and after the hurricane, the effect of relo-
Katrina—and the speed of doing so—made a         most severely damaged areas experienced a         cating them had an unexpected demograph-
tremendous difference in being able to oper-     business boom housing workers hired to            ic consequence. Those cities recovered more
ate. Latter & Blum established temporary         clean up damage; fast food chains that            quickly than New Orleans because their pop-
email addresses for employees, provided          offered workers enormous hourly wage              ulation of skilled and unskilled workers rose
auxiliary office space in Baton Rouge, and       incentives could ensure business operation to     dramatically, while New Orleans experienced
made the company’s Web site and the              feed the recovery workforce, but it caused        a severe decline in workers.



 22                                                                                                                 T H E     C O U N S E L O R
. AWA R D P R E S E N TAT I O N S .

Harris Awarded Landauer/White Prize
IN RECOGNITION OF HIS OUTSTANDING profession-     tion, Harris has founded various organiza-
alism, thought leadership and commitment to       tions including the Continuing Professional
community service, Jonathan David Harris,         Development Foundation, which promotes
CRE, FRICS, of London, was presented with         lifelong learning to more than 10,000 profes-
the James D. Landauer/John R. White Award         sionals a year. He also served as chairman
at the 2009 Counselors of Real Estate Annual      and remains a long-term Trustee of the
Convention in New Orleans. Harris is one of       Educational Enterprise Trust, which mobi-
only two individuals from outside the United      lizes 1,500 businesses and 4,500 professionals
States to have been recognized with the honor.    to bring a meaningful awareness of the pro-
In announcing the award, A.C. Schwethelm,         fession to 70,000 high school students annu-
CRE 2009 Chairman of the Board, recognized        ally. Harris is chairman of the Trustees of the
Harris’ achievements, describing him as some-     Employment Resource Center, which tackles
one for whom “…obstacles have had no place,       the problems of unemployment, and has
except as a spectator sport for those who never   served as a Trustee of Britain’s Prison Reform
tire of watching him smash through them.”         Trust. He currently serves as a Trustee of the
                                                  London Philharmonic, where for many years,
Specializing in property development, invest-     he and his wife have underwritten that orga-
ment, finance and management, Harris’             nization’s Youth Symphony Concerts.
career has spanned more than 40 years.
Rising from a 17-year-old office boy at the       From 2000–2001, Harris served as president of
British-based Pepper, Angliss and Yarwood         RICS and was instrumental in that organiza-         (left to right): Jonathan David Harris, CRE,
to owner of the same company at age 33, he        tion’s global expansion. He has been awarded        FRICS, 2009 Landauer/White Award winner;
has built a long and successful career in real    both the OBE (officer of the order of the British   and 2009 CRE Chair of the Board, A.C.
                                                  Empire) and CBE (commander of the order of          Schwethelm
estate advisory services. Harris has served as
vice chairman of the United Nations               the British Empire) by the British government.
                                                                                                      Established in 1986, the James D. Landauer/John R.
Economic Commission for its Europe/Real           “He is a leader, teacher, innovator and war-        White Award is presented annually to an individual who
Estate Advisory Group, and is a director of       rior,” said Schwethelm, “and believes passion-      has demonstrated outstanding professionalism and who
the Cardinal Group of Companies, a property       ately that the real estate industry should take     has furthered the ideals of The Counselors of Real Estate
investment and development firm.                  an active role in addressing all major issues       organization and its CRE credential. Both members and
                                                  relating to property: homelessness, hunger,         non-members are eligible for the award, which is under-
Along the way, focusing on his strong person-                                                         written by Grubb & Ellis.
al interest in continuing professional educa-     water shortages, and disaster relief.”


. AWA R D P R E S E N TAT I O N S .               In accepting the award, Pappalardo said, "To        A CRE since 1986, and the organization’s 2002
                                                  have been invited into The Counselors was an        president, Pappalardo also has served on
Pappalardo                                        honor in itself. To receive the Committee
                                                  Service Award for doing something I loved
                                                                                                      many committees and task forces as a mem-
                                                                                                      ber, ex-officio member, liaison and vice chair.
Wins Committee                                    doing over the years is an incomparable and
                                                  distinct honor in my lifetime."
                                                                                                      He was instrumental in planning CRE’s first
                                                                                                      major International Symposium, held in 2002
Service Award                                                                                         at Harvard University in collaboration with
                                                                                                      the Design School of Harvard and the Royal
ALBERT S. PAPPALARDO, CRE, president,                                                                 Institution of Chartered Surveyors (RICS) and
Pappalardo Consultants, Inc., New Orleans,                                                            helped negotiate the CRE/RICS Alliance. This
was honored with the 2009 Committee Service                                                           year, he undertook the role of program chair
Award at the 2009 Annual Convention in                                                                of the Annual Convention in his native city of
October in New Orleans. The award, which is                                                           New Orleans, planning and organizing its
endowed by CRE Emeritus George M.                                                                     many events and educational sessions, and
Lovejoy, Jr., recognizes Pappalardo’s long-                                                           using the city to illustrate the renaissance of
term dedication to CRE committee service.                                                             an urban metropolis over significant multi-
In presenting the award, 2009 CRE Chairman                                                            faceted adversity.
of the Board A.C. Schwethelm noted                                                                    Pappalardo specializes in negotiating acquis-
Pappalardo’s “resume of service” over a span                                                          tions, dispositions or leases for principals, and
of 23 years, describing him as a man who                                                              provides assistance to the legal community
exemplifies everything for which the award                                                            through strategic counseling in real estate liti-
stands—leadership, dedication, selflessness,                                                          gation. He also assists government agencies in
and extraordinary effort. “His focus is and                                                           providing counseling and appraisals on real
always has been on what is best for The                                                               estate owned or to be acquired in New Orleans
Counselors, and his passion is to maintain                                                            and Baton Rouge.
the quality and standards that make this
organization great,” said Schwethelm.             (left to right): Albert S. Pappalardo, CRE, 2009
                                                  Committee Service Award Winner; 2009 CRE
                                                  Chair of the Board A.C. Schwethelm

 W I N T E R     2 0 0 9 / 2 0 1 0                                                                                                                        23
.GENERAL SESSION.

“Bricks and Mortar are the Least of Your Worries
MODERATED BY JOHN MELTZER, CRE, president,
Meltzer Properties, Ouray, Colo., and former-
ly of New Orleans, this session presented use-
ful insights into the need for readiness by all
in the event of any type of catastrophe.
Speaker Bob Bertges, executive vice presi-
dent and director of Corporate Real Estate
for Wachovia, Charlotte, N.C., talked about        Bob Bertges           E. Howell Crosby,       Maurice F. Eagan, Jr.   Col. Terry Ebbert    John A. Meltzer,
the need for pre-disaster risk assessment,                               Esq.                                                                 CRE, moderator
mitigation and validation. Plans must be
developed for asset preservation and busi-         them up to check proper tire pressure. He                 the delivery of other critical supplies so busi-
ness continuity, he said, and although the         stressed the need for better planning among               ness could operate on some level.
latter is more important, customers need           government groups before disasters take                   Speaker E. Howell Crosby, Esq., partner,
access to cash, so available facilities are also   place to prevent the problems experienced                 Chaffe McCall, LLP, discussed his experi-
critical. During the hurricane, Bertges used       during Katrina.                                           ences dealing with Katrina without a disas-
communication huts that had been set up in                                                                   ter plan in place. The first problem was find-
advance and were prepared with banks of              T H E C O U N S E L O R S O F R E A L E S TAT E         ing out where everyone was (employees,
satellite phones. His team used pre-set call
times that staff could join, if possible. After
                                                     ANNUAL CONVENTION                                       clients and public facilities). There were no
                                                                                                             functioning courts and no public records
the disaster, his team assessed its actions,         NEW ORLEANS, LOUISIANA                                  because they were under water for a time
documented lessons learned and modified
plans going forward.                                 TURNING IT AROUND
                                                      MASTERING THE NEW URBAN REALITIES
                                                                                                             and were either useless or being dried out.
                                                                                                             Real estate transactions stopped, and deci-
                                                                                                             sions were made on an ad hoc basis to satis-
Speaker Col. Terry Ebbert, president, T.B.
Ebbert & Associates, New Orleans, dis-                                                                       fy client needs. Now, Crosby keeps all
cussed issues that developed among officials       Speaker Maurice Eagen, Jr., Eagan Insurance               records on a computer “stick” that he can
at all levels during Katrina, and the differ-      Agency, New Orleans, talked about how                     take home.
ence between mission-driven (rescue) and           bricks and mortar are small losses, really,                                  Reported by
compliance-driven (recovery) organiza-             compared to loss of income and the loss of                                   Phil Cottone, CRE,
                                                                                                                                president,
tions. As an example, Ebbert told about peo-       employees, who must figure out how to house                                  Property Trust Advisory
ple who waited desperately for evacuation,         and feed their families before they can work.                                Company, LLC,
                                                                                                                                Malvern, Pa.
while 200 buses ordered to take them out           He also described the difficulty in getting
were delayed because a state trooper held          utilities running and developing systems for




                                                                                                                         2010
                                                                                                                                                          O C T. 1 7 - 2 0




                                                                                                                             l
                                                                                                                    Philadelphia
                                                                                                                    CRE ANNUAL CONVENTION




 24                                                                                                                            T H E     C O U N S E L O R
.BUSINESS ISSUES.

Capital Markets Forum
THIS FORUM BEGAN with the following compar-
ison to mortgagees’ gradual recognition of
problem loans in their portfolios: “When the
tide goes out, everyone can see who was
swimming naked.”
The statement, by Irby Cohen, CRE, vice pres-
ident, Bayer Properties, Inc., Birmingham,
Ala., opened this popular session, and he
added that a few lenders have agreed to large
principal write-downs in order to induce
developers/owners to continue making equity
contributions for TIs, leasing commissions
and other capital improvements.
                                                 There is very little capital available for new     percent range. A vacant office building in
Session attendees learned that most lenders      debt, but some life insurance companies are        downtown Dallas (350,000 sq. ft., built in
are unable or unwilling to renegotiate loan      starting to quote loans at 60–65 percent           1965) has attracted interest based on its ask-
terms, and this has prompted some owners to      loan/value ratios, with constants based on         ing price of $16 per square foot.
just walk away from their equity and owner-      25-year maturities.
ship of the property. Other facts: one proper-                                                      In summary, attendees heard that the capital
ty fund marked its equity to zero; Calpers       The good news? Billions of dollars in equity       markets are still incredibly tight. Relief will
walked away from $600 million in a land          capital has been raised and is poised to take      not come until the exuberant valuations of a
deal; and another $18 billion fund is now val-   advantage of lower pricing and vulture             few years ago are squeezed out of asset prices.
ued at $10 billion. Ken Riggs, Jr., CRE, pres-   opportunities. The bad news? Almost all of                         Reported by
ident and CEO, Real Estate Research              this capital is sitting on the sidelines waiting                   Alice Dutton, CRE,
                                                 for further price erosion.                                         consultant,
Corporation, Chicago, commented on the                                                                              Vero Beach, Fla.
abruptness of these massive write-downs as       Attendees also heard about a few sales with
compared to previous down cycles.                multiple bidders. These were usually Class A
                                                 properties with stable leases from credit ten-
                                                 ants. They are pricing at cap rates in the 8.5


.BUSINESS ISSUES.                                   Due Diligence on Landlords. If you are            Technology. Technology provides loca-
                                                    the tenant or advising tenants, fully             tional flexibility for companies and work-
Corporate Real                                      understand who owns and controls the
                                                    real estate. If ownership changes as in a
                                                                                                      ers. More and more technology is wire-
                                                                                                      less;
Estate Forum                                        loan default, who controls the real estate?
                                                    Many things can go wrong in the opera-
                                                                                                      AWP (“alternate work program,” often
                                                                                                      referred to as “alternative workplace”).
DISCUSSION LEADERS, CREs Joe McGauley and           tions of a property when ownership is             Given technological advances, emphasis
Von W. (Buck) Moody, focused on how the             passed back to a financial institution; for       on cost savings and greater focus on AWP,
very different real estate climate of 2009 is       example, something as simple as paying            more people are working at home;
impacting corporate real estate. The session        the utility bills. Most servicing depart-
had an abundance of “takeaways” for counsel-        ments are understaffed and overwhelmed            Changing Office Work Styles.
ing and for understanding new dynamic issues        today, creating a great opportunity for           Collaboration is the new model, and the
and solutions in commercial real estate usage.      consulting, helping tenants when things           big private office is becoming obsolete.
                                                    go wrong and preparing for contingencies;         There is less drywall and more modular;
                                                                                                      office space will not be allocated by title
                                                    Getting Credit for being the Credit. The          but by the time it is used;
                                                    companies that occupy offices, shopping
                                                    centers and industrial facilities today are       Metrics. Companies are measuring use of
                                                    extremely important in this era of con-           space more, as well as occupancy costs
                                                    tracting market demand for real estate.           per employee.
                                                    The tenant is the credit. Tenants have                          Reported by
                                                    more clout than they are given credit for                       Jeanette I. Rice, CRE,
                                                                                                                    vice president,
                                                    and should explore options for how they                         Market and Investment Research,
                                                    can get rewarded for helping keep the                           Verde Realty,
McGauley literally set the stage by providing       value of a property.
                                                                                                                    Fort Worth, Texas
each roundtable participant a placemat with
the outline discussion. The placemats sum-       Moody led a discussion of the wide array of
marized a new way for tenants to approach        corporate real estate trends arising from the
the corporate real estate world in 2009, and     economic environment, as well as longer-
the ways that Counselors can advise corpo-       term trends that continue to gain traction
rate users to think about their space.           and reshape corporate real estate. The topics
                                                 included:
 W I N T E R     2 0 0 9 / 2 0 1 0                                                                                                              25
.BUSINESS ISSUES.

Litigation Services Forum:
Nuances of Real Estate Legal Issues in Different U.S. Jurisdictions
A PRESENTATION by Edward (Dirk) Wegman of
the New Orleans-based firm of Jones Walker,
focused on the uniqueness of the Civil Law
System around which Louisiana operates. All
other states in the U.S. utilize the Common
Law System. The major difference between
the two involves terminology. “Immovable
Property” under the Louisiana System
                                                   Julie S. Mebane,    George W. Powell, Jr. Samuel M. Scoggins, Edward W. Dinan, III, Raymond A. Jackson,
becomes “Real Property” under Common               Esq., CRE           Esq., CRE             Esq., CRE           CRE, Forum co-chair CRE, Forum co-chair
Law. “Moveable Property” in Louisiana is
referred to as “Personal Property” in other        pality, although a pilot program is currently       Scoggins ended his remarks with a fascinat-
states. Using a variety of examples, Wegman        underway which could ultimately bring               ing tale of drama, intrigue, greed, romance,
illustrated the complexities of Louisiana Law      county-based assessing to that state.               and major misappropriation of funds: all
when compared to the common law doc-                                                                   part of an eroding Cincinnati real estate proj-
trines of other states which, to the joy of        Samuel M. Scoggins, CRE, member, Frost
                                                   Brown Todd, Cincinnati, discussed the               ect known as the Kenwood Towne Centre
members of the local Bar, make retention of                                                            which housed a brand new Nordstrom
local counsel a virtual necessity in arbitrating   nuances of real estate legal issues in different
                                                   jurisdictions of the U. S.                          department store, a dearth of unoccupied
cases in Louisiana.                                                                                    retail space, and a crumbling parking garage.
Julie Mebane, CRE, partner, Duane Morris           He also briefed attendees on what he consid-        In Scoggins’ words, “…four owners, six
LLP, San Diego, addressed transactional law        ers a particularly important case in Illinois.      banks and 30–40 unpaid subcontractors—
issues in California. A growing number of          The Illinois Supreme Court held oral argu-          O.J.’s trial was easier than this!” It is likely
“For Sale” properties have been converted to       ments on an appeal by Provena Covenant              that the property’s prime location coupled
rental units. The California Department of         Medical Center challenging the State                with the region’s low vacancy rates will lead
Real Estate (DRE) monitors all projects of         Department of Revenue’s denial of a property        to resuscitation. However, the project also
five or more units with a Final Subdivision        tax exemption for its hospital facilities. The      shows that even in the conservative Midwest,
Report (White Report), required for each. If a     Appeals Court had ruled that the hospital did       where the economic highs are not as high
project does not have a “White Report,” a          not provide sufficient charity care to qualify      and the lows not as low, there are still more
buyer may have the right of rescission.            for a charitable tax exemption. The hospital        than a few bumps in the road to recov-
Conversely, lenders who foreclose on a proj-       argued there is no black line test and that the     ery...for all of us.
ect are, in certain cases, exempt from this        true test is whether it made charity care avail-
                                                                                                                       Reported by
requirement. Mebane stressed the impor-            able to all…not the number of charity cases it                      Peter E. Sockler, CRE,
tance of understanding the structure of a          handled. The consequences of denial of the                          principal,
                                                   exemption, both to the tax recipients and to                        Sockler Realty Services Group, Inc.,
project, the financial situation of homeown-                                                                           East Windsor, N.J.
ers’ associations, and the status of the           the thousands of nonprofit hospitals across
improvements underway in fractured condo-          the country which currently enjoy tax exempt
minium projects. Construction defects and          status could be enormous, with far-reaching
liability for the original developer typically     implications on health care costs, a particu-
do not transfer to lenders taking back a prop-     larly sensitive issue at this time.
erty. However, in cases where lenders must
step in and assume responsibility for their
units (from physical maintenance to taking
positions on boards of associations), a “single
purpose entity” is often created to hold the
property, shielding the lender from potential
liability for construction defects.
George W. Powell, Jr., CRE, of Duane Morris
LLP, Miami, spoke about ad valorem tax
issues in New Jersey and Florida. Florida uti-
lizes a county-based system of assessing
whereby a taxpayer will file suit against the
country property appraiser, county tax collec-
tor and the Florida Department of Revenue.
In New Jersey, the defendant is the munici-




 26                                                                                                                    T H E     C O U N S E L O R
.BUSINESS ISSUES.

Public/Private
Partnerships Forum
THIS SESSION, co-chaired by CREs Alan                                                                    Maurice (Pres)       John L Renne,     Alan G. Hembel,
Hembel, president, AGH Associates, LLC,                                                                  Kabacoff             Ph.D.             CRE, Forum co-chair
Middleton, Wisc.; and Mike MaRous, presi-
dent, MaRous & Company, Park Ridge, Ill.,                                                                the inexpensive transportation (streetcar)
featured speakers John Renne, Ph.D., AICP,                                                               had on new restaurants and retail develop-
managing director, The Todd Group, New                                                                   ment. Kabacoff ’s company had a vision for an
Orleans; and Maurice Kabacoff, co-chair-                                                                 ambitious 4,000-acre redevelopment at a cost
man of the board and CEO of HRI Properties,         oil and reducing the carbon footprint. Renne         of more than $4 billion in New Orleans before
New Orleans.                                        concluded by emphasizing the need to balance         Katrina. Other discussion included the posi-
                                                    the public sector, the private investors and the     tive influence of Katrina on this potential
Renne began by discussing a transit-orientat-       concessionaires. Entitlements and approvals by       redevelopment and obviously, the negatives,
ed, mixed-use development located near a light      the government agencies and public funding           because of economic and political problems.
rail station in a Denver suburb. He provided        coupled with private investor participation is
insight as to funding problems, zoning and                                                                                    Reported by
                                                    key for the construction of the project, he said.                         Michael S. MaRous, CRE,
entitlement issues, as well as public assistance,                                                                             president,
including a discussion on raising equity. He        Kabacoff, a major new Orleans developer,                                  MaRous & Company,
also discussed his recent book Transit Oriented     spoke about his company’s history, including                              Park Ridge, Ill.
                                                    the redevelopment of an older, large depart-                              Forum co-chair
Development, and emphasized the need for
communities to work with developers with            ment store into the Ritz Carlton Hotel on
regard to additional density and help with          Canal Street. He discussed bringing back the
infrastructure by reducing our dependency on        streetcar, and the very positive influence that



.GENERAL SESSION.

Multi-Family Recovery:
From Scarcity to Excess Capacity?
THIS SESSION, moderated by CRE Lewis W. Stirling, III, executive vice
president, partner, Stirling Properties, New Orleans, focused on multi-        Dennis Adams       David W. Gleeson, Larry G. Schedler,        Lewis W. Stirling, III,
family housing.                                                                                   CRE               CCIM                      CRE, moderator
Larry Schedler, principal, Larry G Schedler & Associates, Inc.,
Metairie, La., presented an update on the New Orleans apartment mar-           Dennis Adams, executive director of Christopher Homes, Inc. in New
ket, which changed dramatically following Hurricane Katrina. Prior to          Orleans, which was founded in the wake of Hurricane Betsy in 1965,
the storm, most units were 25 or more years old, of B & C quality; the         spoke regarding the challenges that the faith-based agency has encoun-
storm destroyed many of these properties, leaving an immediate short-          tered since Katrina. The hurricane destroyed 567 units, leaving 1,860 res-
age of housing. Pricing (for sales purposes) did not follow normal met-        idences. Because of the significant reliance on HUD and its regulations, it
rics due to the lack of current income; instead, it primarily was based        is unlikely that many of these units will be rebuilt. The HUD 202/8 pro-
on the condition of the units and the ability to quickly re-lease. Most        gram has no provision to rebuild or relocate housing stock.
of the original tenants had left town, not to return for months. One           David W. Gleeson, CRE, executive vice president, L & B Realty
challenge for the property owner was finding the previous tenants and          Advisors, Inc., Dallas, gave a national view of the current state of the
handling their personal property. Initially, new tenants were relief           multi-family market. With vacancy rates at 7.3 percent (a 22-year
workers and homeowners whose homes required significant renova-                high), permits for all classes of apartments are significantly down and
tion. Because of the immediate shortage of available and usable units          national developers are not planning significant construction activity
and the influx of new tenants, rents soared. As tax credits and addi-          for the remainder of 2009 or 2010. Because of high vacancy rates, rents
tional government funding arrived, more apartments were built or               are lower, thus, property values are 15–30 percent lower. Many of these
revitalized, especially in the low-income sector.                              properties were purchased or refinanced during the boom years. With
                                                                               these loans coming due, and the properties worth less than the loan
                                                                               balance, many investors, including pension funds and institutions, will
                                                                               walk away from them.
                                                                                               Reported by
                                                                                               Garner Chandler, CRE,
                                                                                               Beach Properties of Florida,
                                                                                               Santa Rosa Beach, Fla.




 W I N T E R      2 0 0 9 / 2 0 1 0                                                                                                                          27
.GENERAL SESSION.

Infrastructure Choices and Funding Shape a Community’s Future
THE CHOICES WE MAKE about infrastructure
today will shape our lives, and those of our                                                       (left to right): James Bridger;
                                                                                                   Patrick Gallwey; and James
children and grandchildren, said opening                                                           J. Curtis, III, CRE, moderator
speaker James J. Curtis, III, CRE, managing
partner, Bristol Group, San Francisco, in his
comments to CREs during this session enti-
tled “Infrastructure Choices and Funding
Shape a Community’s Future.”
Curtis said 85 percent of infrastructure projects
in the U.S. cost under $25 million, and noted
that as a country, we formerly spent 6–8 per-
cent of GDP on infrastructure. “We need to
return to that level if we expect to stay compet-
itive,” he said, adding that investment in infra-
structure should be considered in the context
of the major issues facing the U.S. today:
    security;
    energy independence;
    environment;
    carbon footprint;
    reduced congestion;
    efficient transportation systems;
    global competitiveness;
    quality of life.
And, when we consider the issue of climate
change, said Curtis, we must keep in mind
that more than 60 percent of
CO2/greenhouse gas emissions are tied to
                                                    Jim Bridger, general manager, New Orleans                            Reported by
land-use decisions.                                                                                                      Gary Ralston, CRE,
Using New Orleans as a backdrop to illustrate       Public Belt Railroad, said his group has                             president,

infrastructure issues, speaker, Pat Gallwey,        worked closely with the Port of New Orleans                          Ralston Realty, Inc.,
                                                                                                                         Lakeland, Fla.
chief operating officer of the Port of New          to create a cooperative marketing effort, and
Orleans, noted that the city has a distinct         together, they are attempting to attract ship-
advantage as a port because of its rail net-        ments from China. One of Bridger’s long-
work and that it is a good alternative to           term goals is to use rail lines along the
southern California ports.                          Interstate-10 corridor for commuter rail,
                                                    which would reduce automobile commuting
Gallwey estimated that damage from Katrina          between Baton Rouge and New Orleans.
approached $150 million, and said the Port
has recovered approximately $123 million            Improvements over the past eight years have
from insurance. He noted that post-Katrina,         included replacing all “90-pound” main rail
the channel and Mississippi River Gulf Outlet       lines with current standards. This enabled
have been closed, leaving the Mississippi           current-size rail cars to move safely and
River as the only access to the Port of New         quickly along rail system, and resulted in a
Orleans. Pre-Katrina, said Gallwey, cargo           substantial increase in higher revenue traffic
tonnage was more than 10 million short tons         from Class One RRs.
(six million in 2008); the decline was the          Curtis summarized the session: “Bottom


                                                                                                                   2010
                                                                                                                                                 O C T. 1 7 - 2 0




combination of issues with the Port and the         line—this is about choices. As to infrastruc-
impact of the economy. The cruise ship busi-        ture as a “global topic,” we have a responsibil-


                                                                                                                       l
ness also has suffered.                             ity to build smarter houses, smarter neigh-
                                                    borhoods, smarter regions and if we do so, we
                                                    will have a smarter nation.”                              Philadelphia
                                                                                                              CRE ANNUAL CONVENTION




 28                                                                                                                      T H E       C O U N S E L O R
                                                                                                      Bouchard, by contrast, remarked that
                                                                                                      Canadian property markets have not been
                                                                                                      affected as much as those in the U.S. He
                                                                                                      estimates that Canadian values are off by
                                                                                                      10–15 percent. Canada’s most distinctive
                                                                                                      difference is that there are only eight or nine
                                                                                                      banks involved in the property markets, and
                                                                                                      they have brought discipline to the market.
                                                                                                      Banks in Canada mark their portfolio loans
                                                                                                      to market, adding to transparency. In addi-
K.C. Conway, CRE          Michel Bouchard         Hugh F. Kelly, CRE       Byron Koste, CRE,
                                                                           moderator                  tion, the best assets are held by pension
                                                                                                      funds with deep pockets that can wait out
.GENERAL SESSION.                                                                                     the cycle, just as they experienced signifi-
                                                  that while approximately 100 banks have
                                                  failed so far in this cycle, the S&L crisis would   cant price declines in the 1990–1991 reces-
Economic Update                                   suggest more are still likely. Approximately        sion but recovered values afterward.
                                                  1,400 S&Ls were closed, and another 2,600           Bouchard pointed out that Toronto and
THIS HIGHLY ATTENDED SESSION featured three                                                           Calgary were the two Canadian markets that
                                                  financial institutions consolidated or merged
speakers: K.C. Conway, CRE, real estate sub-                                                          have gotten ahead of themselves. The oil
                                                  in the 2–4 years following the peak of the
ject matter expert, Federal Reserve Bank of                                                           boom in Alberta encouraged an oversupply
                                                  S&L crisis. The community banks are facing
Atlanta: Hugh Kelly, CRE, clinical associate                                                          in Calgary where office vacancies approach
                                                  worse commercial real estate concentrations,
professor of real estate at New York                                                                  20 percent and approximately 20 percent of
                                                  deterioration in financial ratios and similar
University, New York City; and Michel                                                                 new supply has been given back to lenders.
                                                  business pressures today. Community banks
Bouchard, principal of Altus Helyar Real                                                              In Toronto, office vacancies have reached 16
                                                  will be faced with the challenge of developing
Estate Services, Quebec. Each gave their                                                              percent as a result of excess supply coming
                                                  a new business model that is less dependent
impressions of where they thought the econ-                                                           in line. But REITs have raised substantial
                                                  on commercial real estate lending to survive.
omy was headed in 2010. It was moderated by                                                           capital, so prices will be weakly supported.
                                                  What that model will entail is the key ques-
Byron Koste, CRE.                                                                                     He expects cap rates to rise by 100 basis
                                                  tion for the banking industry.
Conway set the stage with an overview of                                                              points or so, and that 2010 will witness a
                                                  Kelly believes there has to be an understand-       turn in the market.
commercial real estate conditions by noting
                                                  ing of change and risk to understand the
how much of the total commercial real estate                                                          The presentations were followed up by lively
                                                  future of the economy, and named five items
debt is held by U.S. banks. In aggregate, U.S.                                                        discussion moderated by Byron Koste, CRE,
                                                  that were a part of this change:
banks hold $1.556 trillion of that debt. CMBS                                                         executive director, University of Colorado
is in second place with approximately $750           Cyclical change;                                 Real Estate Center, Boulder. Some major
billion of debt. Most of this debt faces refi-       Trend-driven change;                             issues of importance to Counselors arose,
nancing over the next 36 months, and how it          Motivation change;                               including changes in appraisal practice which
will be refinanced, and where the capital will       Change of state: “cost of risk” is now           have led to a “lowest common denominator”
come from to fill the developing “ReFi-Gap,”         priced by excess scarcity;                       approach that has impaired appraisal quality
is the challenge for the commercial real estate      Disruption.                                      in many cases. This is now exacerbated by the
and financial services industries. He noted       Kelly pointed out that change itself is con-        fact that many appraisers are working outside
                                                  stantly changing and many expectations              of their home markets and may miss impor-
                                                  about cycles turn out to be incorrect. His view     tant nuances of value.
                                                  is that the correction will be swifter than         Opportunity capital is still on the sidelines,
                                                  expected due to the massive amounts of capi-        and an emerging strategy is to let the lender
                                                  tal that are on the sidelines today. He also        fail and buy assets more cheaply from the
                                                  pointed out that corporate profits have been        FDIC, thereby prolonging the process.
                                                  growing dramatically since 2000 which was
                                                  not the case for the previous decade. Coupled       While most think that interest rates should
                                                  with strong corporate profits, we have seen         remain low and that any threat of inflation is
                                                  increases in household savings as well as very      a year or two away, we may be surprised in an
                                                  high growth of M3, a monetary measure that          era of weak dollars by foreign Treasury buy-
                                                  includes institutional money market deposits.       ers bidding up rates independently of any Fed
                                                  Taken together, they represent a “Hoover            strategies.
                                                  Dam of capital” that will be brought to bear                        Reported by
                                                                                                                      Marc Louargand, Ph.D., CRE, FRICS,
                                                  on the property sector albeit in an atmosphere                      co-director,
                                                  of restrained credit. Kelly’s advice is that the                    Center for Real Estate
                                                                                                                      & Urban Economic Studies,
                                                  downturn provides an opportunity to plan,                           University of Connecticut,
                                                  acquire talent and acquire sites at a measured                      Storrs, Conn.
                                                  pace and reduced cost compared to the condi-
                                                  tions of a few years ago.




 W I N T E R       2 0 0 9 / 2 0 1 0                                                                                                                29
T H E C O U N S E L O R S O F R E A L E S TAT E




                                                  NETWORKING
                                                                                                                                     Samuel M. Scoggins, CRE
ANNUAL CONVENTION
NEW ORLEANS, LOUISIANA
TURNING IT AROUND
MASTERING THE NEW URBAN REALITIES


    Jeanette I. Rice, CRE;
       Anthony F. Souza, CRE




                                                                   Marc Louargand, CRE;
                                                                   Thomas Edwin Reed, CRE



                                            Stephen P. Navarro, CRE; Jonathan David Harris, CRE; Jeniffer Harris



                                                                                                                   Albert S. Pappalardo, CRE

                                                                                                                                          A. C. Schwethelm, CRE




  Roy J. Schneiderman, CRE                                                                                                               James J. Curtis, III, CRE




  30                                                                                                                             T H E     C O U N S E L O R
                                                         Jean C. Pinard, CRE Emeritus            Joseph F. McGauley, CRE




Byron Koste, CRE; Scott R. Muldavin, CRE

                                                                                                                    Frederick J. Campbell, CRE
Gerald M. Levy, CRE

                                                                                                 William H. Brownfield, CRE; Reid C. Wilson. CRE




                  Raymond A. Jackson, CRE

                                                                                                 William Terry Kennon, CRE



                                                                          Patrick J. Egan, CRE




                                K.C. Conway, CRE; Jean C. Felts, CRE; Gregory B. Ibbetson, CRE

                                                                                                                          John A. Meltzer, CRE




W I N T E R     2 0 0 9 / 2 0 1 0                                                                                                            31
Margaret Ann Couillard; Anthony F. Souza, CRE; Barbie Benton




                                                                              Marilyn and A.C.
                                                                              Schwethelm, CRE


  Peter F. Korpacz, CRE and Bernadette;                          Julie M. McIntosh, CRE;
  Stephanie K. Dubicki, CRE; Sung Lee, CRE                       K.C. Conway, CRE




                                                                                                   Marsha and Ivan Faggen, CRE;
                                                                                                   Maureen and Philip S. Cottone, CRE




SOCIALTIME               Susan R. Gwin, CRE




                                                 William C. Steffey, CRE; George W. Powell, Jr.,
                                                 CRE; John W. Steffey Sr., CRE
                                                                                                       Judy Pappalardo;
                                                                                                       Marilyn Schwethelm



                                                                                                   Alvin O. Benton, CRE




A.C. Schwethelm, CRE; F. Thomas Ustler, CRE

                                                 William T. Chandler, CRE; Shelley Durfee;
                                                 Stephanie and Jon Yamaguchi, CRE




                                                 Lynda Jo Shlaes; Kathy Hannoch;
                                                 Gizelle Sockler; Mary Jo Cowan (seated)

32                                                                                                               T H E    C O U N S E L O R
Jon F. Yamaguchi, CRE                                                                                   Richard A. Hanson, CRE




                                                    Julie M. McIntosh,CRE;
                                                    Raymond T. O'Keefe Jr., CRE


                                                                              Otis E. Hackett, CRE;      Kathleen and K.C. Conway, CRE; John J. Leary,
                                                                              Alice J. Dutton, CRE       CRE; Marilyn and Byron Koste, CRE




                                                                                                                             William T. Chandler, CRE;
                                                                                                                             Garner Chandler, CRE




Robert H. McKenzie-Smith, CRE;                       Jules H. Marling, III, CRE;
A.C. Schwethelm, CRE                                 Peter K. Shorett, CRE



                                              Barry S. Ludwig, CRE; Joseph D. Pasquarella, CRE;
                                              Arthur P. Pasquarella, CRE; Gerald N. Zaddack, CRE




                                                                                                        Marilyn and A.C Schwethelm, CRE; Judy Pappalardo


SPOUSES




Jennifer Harris, Barbie Benton, Maureen Cottone, Christy Avery,                        Spouse Farewell Breakfast
Marilyn Schwethelm


 W I N T E R     2 0 0 9 / 2 0 1 0                                                                                                                 33
.OPEN FORUM.

CRE Strategic Planning
THE PRESENTATION DURING THIS OPEN FORUM reflected the results of the
advance work of the 2010–2015 Strategic Planning Committee, the
Visioning Group (which met twice over the summer) and the compila-
tion of the results of a member-wide survey.                                                Anthony F. Souza                                .
                                                                                                                John J. Leary, CRE Kenneth P RIggs,                .
                                                                                                                                                              Art P Pasquarella,
                                                                                            CRE                                    CRE                        CRE, moderator
2010 CRE Chair of the Board Art Pasquarella discussed the major
goals of the plan, including a shift in the function of the Board of                        John J. Leary, CRE, noted that next steps will include:
Directors, so that it will devote a significant part of its agenda to                          Incorporating member comments by the committee;
exploring a mega-issue facing the organization. Four such issues were
identified for consideration:                                                                  Submitting the draft plan to the Board of Directors at the 2010
                                                                                               Midyear Meeting in Seattle;
   How do we best identify and communicate the value proposition
   to members and prospective members?                                                         Implementing the plan in Spring 2010;
   How do we attain both diversity and quality of experience in mem-                           Holding an initial strategy-based Board meeting in Fall 2010 in
   bership and sustain the viability and relevance of the organization?                        Philadelphia.
   How do we energize programs to encourage participation?                                  Past CRE Chairman Tony Souza, and 2009 chair of the Strategic
   How do we focus and prioritize our limited human and financial                           Planning Committee, led the group through the core mission and prin-
   resources?                                                                               ciples of the draft plan and of the organization. Among the principles:
                                                                                               to serve as a leading source of real estate advisory expertise and
                                                                                               integrity with members serving as an indispensable resource to
                                                                                               each other, our clients, our industry and our communities;
                                                                                               to serve as a platform for professional relationships, insight and
                                                                                               access to diverse experience.
                                                                                            Ken Riggs, CRE, co-chair of the committee, discussed the process of
                                                                                            refining this plan, including addressing nuances such as specific
                                                                                            wording.
                                                                                                             Reported by
                                                                                                             Noah Shlaes, CRE,
                                                                                                             managing director,
                                                                                                             Strategic Consulting,
                                                                                                             Grubb & Ellis,
                                                                                                             Chicago




Robert H. McKennon, CRE, leads discussion at the Visioning Group session in
New Orleans, preceding the Annual Convention.




  Jay’s Counselor Survey
  Below are the results to four survey questions recently posed to CREs by The Counselor’s Editor in Chief Jay Marling
  on the state of commercial real estate. You can get an idea here of what your fellow CREs are thinking.           (Figures represent percentages)


   What do you think the average rent growth rate will be for                              Will there be improved availability of financing for
   commercial real estate in the U.S. over the next 10 years?                              commercial real estate over the next 12 months?
                                                                     Significantly above
           34.8                30.4           19.0          15.0     inflation rate                43.4                    32.8              23.7
                                                                     0.7
       In line with     Slightly below    Slightly above      Significantly below                   No                 It will remain        Yes
      inflation rate     inflation rate    inflation rate     inflation rate                                          about the same
                                                                                                                        as it is now

   How long before we see significant commercial
   real estate construction activity in the U.S. again?                                    Where are we in the current real estate cycle?

                                                         7.7         8 years or more
              47.1                        38.3                                                        52.0                        42.5
                                                                     2.9                                                                               On the way back up
                                                                                                                                                       5.5
                                                               Within next 2 years            Still on the way down             At or near
            2-4 years           4-6 years        6-8 years
                                                               4.0                                                             the bottom




 34                                                                                                                                            T H E    C O U N S E L O R
Survey Shows Counselors Eager
to Participate in the Classroom
A RECENT SURVEY of The Counselors of Real
Estate membership by CRE Marc
                                                   MEMBERS CURRENTLY ACTIVE IN CLASSROOMS
Louargand, Ph.D., found that of the nearly
300 respondents, more than one third active-
ly spend time in college classrooms as guest           65                                                Act as a mentor (22%)
lecturers, co-teachers or professors in both
undergraduate and graduate real estate pro-            14     Conduct site tours for students (4.7%)
grams, and that another third would like to
participate or increase their participation,           29                Provide case studies for academics to use in their classes (9.8%)
but have not yet had the opportunity.
                            “There are many            58                                       Provide internships to students (19.7%)
                            ways CREs can
                            share their expert-        119                                    Guest lecture in one or more courses (40.5%)
                            ise with tomor-
                            row’s     property         44                             Teach a course in its entirety (14.9%)
                            professionals,
                            such as providing          56                                      Give money to the real estate program (19%)
                            internships and
                            site tours and act-
                                                       71                                                    Give money to the school (24.1%)
                            ing as mentors to
                            students,”     said
Marc Louargand, CRE         Louargand, co-             57                                      Other (19.3%)
                            director of the        |             |                |             |                 |                 |            |             |
                            Center for Real       0             20               40            60                80                100          120          140
Estate and Urban Economic Studies at the
University of Connecticut, Storrs. “Another                                                                                        CIC Survey 2009; Marc Louargand
way is by participating in the Counselors in
the Classroom program, which provides
funding from The Counselors of Real Estate         MEMBERS WHO WOULD DO MORE OR BEGIN TO PARTICIPATE
Foundation to local CRE chapters for specif-
ic use for these projects.                             14            Not interested in mentoring (4.7%)

Louargand also works with the American
                                                       71                                                     Would act as mentor (24.1%)
Real Estate Society (ARES)—the largest
group of real estate academics worldwide—
                                                       20                     Would conduct site tours (6.8%)
to match Counselors with academic mem-
bers of ARES. “Our goal is to provide stu-
dents with “real world” insight and context            35                                       Would provide case studies (11.9%)
to real estate classes, and the association
between these two groups can make it hap-              26                             Would provide internships (8.8%)
pen,” says Louargand. “Along the way, we
have a great opportunity to increase the visi-         113                                                                  Would guest lecture (38.4%)
bility of CREs, the CRE credential and all
that stands behind it.”                                39                                               Would give money to school (13.2%)
For more information about the CRE                 |                      |                         |                          |                      |
Counselors in the Classroom program, contact      0                      20                         40                      60                        80
Marc Louargand at marcl@business.uconn.edu.
                                                  Total number of respondents: 294                                                 CIC Survey 2009; Marc Louargand




 W I N T E R     2 0 0 9 / 2 0 1 0                                                                                                                            35
Market Monitor                  D A T A A N D C O M M E N T A R Y C O U R T E S Y O F H U G H F. K E L LY, C R E / R E A L E S T A T E E C O N O M I C S


                Value of Construction Put in Place                                                         Office            Multifamily                Warehouse
$70,000                                                                                               Rising vacancy is just one of the reasons for
                                                                                                      plummeting construction volumes. Banks are
 60,000                                                                                               experiencing huge losses on their portfolios of
                                                                                                      land and development loans, and there will be
               Millions of 2002 Dollars
                                                                                                      little appetite for new such lending in the imme-
 50,000
                                                                                                      diate future. The only exceptions in 2010 will be
                                                                                                      build-to-suit projects for high-creditworthy occu-
 40,000                                                                                               pants. The lessons of the early 1990s suggest
                                                                                                      that once development bottoms out, it takes a
 30,000                                                                                               while to get revved up once again. It is not
                                                                                                      unreasonable to foresee a similar pattern ahead,
                                                                                                      with a sequential return to new construction:
 20,000                                                                                               industrials reviving in 2011, multifamily in 2012,
                                                                                                      and offices in 2013. And, of course, the longer
 10,000                                                                                               the delay, the greater the “sticker shock” in new
                                                                                                      building rents when they finally kick in.
                                                                                                      Sources: U.S. Census Bureau Data;
       0
            1993                          1999                          2005               2009       Constant Dollar Conversion by Hugh F. Kelly, CRE




              Personal Consumption Expenditures
     280                                                                                                  Durables             Non-durables

                                                                                                     Even with the successful “cash for clunkers” pro-
                                                                                                     gram boosting auto sales in August, third-quarter
     230                                                                                             retail spending was fairly flat. Both durable and
                                                                                                     non-durable goods spend remain well beneath
                   Index 1990 = 100                                                                  their year-ago levels. Both an “incomes effect”
                                                                                                     (related to unemployment) and a “wealth effect”
                                                                                                     (reflecting lower asset values in stocks and hous-
     180
                                                                                                     ing) have consumers reining in their spending.
                                                                                                     Savings has increased, and households paid down
                                                                                                     credit card debts for several quarters, before a
                                                                                                     reported uptick in 3Q 2009. As recovery matures
     130                                                                                             during 2010, look for stronger retail sales figures
                                                                                                     quarter-by-quarter for the next year or so.
                                                                                                     Sources: Department of Commerce (data); indexation by
                                                                                                     Hugh F. Kelly, CRE
      80
       1990          1993       1996        1999         2002          2005         2008



                                      Vacancy Rates
                                                                                                          Industrial              Office               Residential
     19%
                                                                                                     A rising tide of vacancy is washing over the commer-
     17                                                                                              cial property markets, negatively impacting net
                                                                                                     operating incomes just at the time that the capital
     15
                                                                                                     markets are constricting funding to real estate. The
     13                                                                                              result has been that the number of “distressed
                                                                                                     assets” across the U.S. has been on the rise. There
     11                                                                                              are reports of billions of dollars in “vulture fund” (aka
      9                                                                                              “opportunity capital”) on the sidelines waiting to
                                                                                                     pounce on troubled assets as they become available.
      7                                                                                              Such funds clearly understand the rules of the game:
                                                                                                     investments (either debt or equity) that are made at
      5
                                                                                                     market troughs are the most successful in overall
      3                                                                                              returns. This would predict a steady return of liquidity
                                                                                                     to the real estate sector in 2010–2011, and beyond.
      1                                                                                              Sources: CB Richard Ellis (Office, Industrial);
                                                                                                     U.S. Census (Residential)
     -1
36
36         90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
                                                                                                                                     T H E
                                                                                                                                     T H E       C O U N S E L O R
                                                                                                                                                 C O U N S E L O R
                                                                                                    Trends in U.S. Stocks and Bonds
       S&P 500               Lehman Long Bond Index
                                                                   25                                                                                                                    18
  Earlier in the year, many believed that the stock
  market recovery couldn’t be sustained and that                                                                                                                                         16




                                                                                S&P 500 Composite
  indications of an economic rebound before the                    20
  end of 2009 were simply too optimistic. We                                                                                                                                             14
  thought that equity prices had overcorrected in
                                                                                                                                                                                         12




                                                                                                                                                         Lehman Long Bond Index (000s)
  the panic, and that the national economy was
                                                                   15
  more resilient than the pessimists felt. By                                                                                                                                            10
  November, it appears that consensus is forming
  around the sunnier outlook. Long-bond rates                                                                                                                                            8
  have been stabilizing, and corporate earnings                    10
  are routinely exceeding analysts’ expectations,                                                                                                                                        6
  buoying stock prices. If the financial markets stay
                                                                                                                                                                                         4
  on track, the first key piece in a broad economic                 5
  expansion is in place. 2010 could have “surprises                                                                                                                                      2
  on the upside” as its major theme.
  Sources: Standard & Poors; Lehman Brothers                        0                                                                                                                    0

                                                                     1990                                  1995             2000                 2005



       GDP             Non-Farm Employment                                    Non-Farm Employment and Real GDP
  Most economists in and out of government now                     8%
  consider the trough of the recession to have                                                                                   Year-Over-Year Change
  occurred at midyear 2009. Third-quarter GDP is                    6
  estimated to have risen 3.5 percent, though total
  output remains 2.3 percent below what it was one
                                                                    4
  year ago. The Blue Chip Economic Forecast has
  the nation on track for about 3 percent growth
  throughout 2010. Jobs are still bleeding away,                    2
  and while we should see some positive employ-
  ment numbers tallied during the first quarter                     0
  2010, it will be at least two to three years before
  the U.S. recaptures the 7.3 million jobs lost since               -2
  December 2007. About $160 billion of the $787
  billion in stimulus funding has been spent, and
  2010 is slated to be the major year for disburse-                 -4
  ments, which the Obama administration hopes
  will accelerate hiring across the U.S.                            -6
  Sources: U.S. Bureau of Economic Analysis; U.S. Dept. of Labor         1990                                  1995          2000                2005



                                                                                                         Interest Rates and Inflation
       10-Year            CPI           3-month                    10%
  The Fed’s monetary policy remains aggressive. Short-
  term interest rates remain near zero as “quantitative              8
  easing” programs pump liquidity into the financial
  system. As noted in previous Counselor notes, the                  6
  Fed is allowing banks an arbitrage opportunity
  between risk-free Treasuries at the short and longer
  end of the yield curve to rebuild their capital bases.             4
  Such a policy in 1993 set the stage for renewed bank
  lending in 1994, and eventually this pattern will                  2
  repeat itself in this credit crunch. With the consumer
  sidelined, CPI inflation is tame, though the so-called
                                                                     0
  “deflation” associated with the downturn has already
  runs its course. Look for all three lines on this graph
  to move modestly upward over the coming year.                     -2
  Sources: U.S. Dept. of the Treasury; U.S. Census Bureau
                                                                    -4
S U N T EE RR                                                            90                         92    94      96   98   00       02     04      06   08                              37
W I M M           22 00 00 98 / 2 0 1 0                                                                                                                                                  37
                                                                                                                                 Presorted
                         OtL       The                                                                                           Standard




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