Great article in the HBR about the diseases of leadership – from the view of Pope Francis. Mixing religion and management doesn’t always end well, but I think you will find this an excellent read:
The Fifteen Diseases of Leadership
I have been guilty of several of these in my career – I think I’ll post them next to the desk. Any that are missing here?
HT DB.
While most of the solutions proposed in here would only work in very specific locations, I do like his suggestions about getting natural light into the units. We are building too many rabbit-hutch units that drive up the pro-forma rent per square foot, but are not particularly livable.
Maybe it’s an omen – I’ve been asked in three different phone conversations over the last three days, what was on my summer reading list and if I had any recommendations. How about three books I recommend you put on your list?
First up:
Michael Pollan is one of the outspoken advocates for improving our food chain. I started reading his material after seeing the frightening documentary “Food, INC.” His mantra of “Eat food, not too much, mostly plants” is a call to action that our increasingly obese nation should listen too. This is an excellent, informative read.
Joel Kotkin is one of my favorite columnists on affairs urban and political. This short book is a tribute to one of the greatest human creations – the city. Kotkin follows the progression of cities as centers of spiritual, economic and political life.
Another one of my “regular reads,” Chet Raymo is a delightful science writer. In this relatively short book, Raymo explores how we found our place in space and time and what the implications of that are for humanity.
I hope you all have a wonderful reading summer – if you have any recommendations for me, drop me a line!
The apartment market in Nashville continues to do well. Further validation of that came with the closing of the 560-unit Wyndchase Aspen Grove in Franklin, Tennessee. The deal was acquired from Crow Family Trust by Berkshire Property Advisors for $83 million or $148,200 per unit.
As the developer of that property back in 1996-97, I am proud that the Wyndchase deal is the single largest apartment transaction in Nashville’s history. It is a beautiful property – I am especially pleased with how the landscaping has filled in and the continued good looks of the architecture. A great team worked long and hard on that deal, it is nice to see her aging so well!
There’s a small piece of secret trivia about the property – the legend of “Franklin’s Tower.” Back in my college days I was part of a band that covered a lot of Grateful Dead hits, including “Franklin’s Tower.” Wink, wink, nudge, nudge – some year’s later, I got to build it:
I wish her new owners great success with this investment!
I’ve been away awhile – being too busy to blog isn’t a bad thing! I have been keeping up with my reading and thought this might be a good time to share some articles on events and trends that are swirling around us today.
First, if you weren’t able to attend one of the “Emerging Trends” conferences that Urban Land Institute hosts every year, you owe it to yourself to get caught up with the thinking in the commercial real estate arena for 2014. Take a look at the “Emerging Trends 2014” report and let me know if you concur with what the “thought leaders” are looking at…you can download it here.
There are a couple of newsletters that I follow weekly, if not daily. One of them is the PIMCO Investment report – Bill Gross over there has some excellent insights. “The Second Coming” does not disappoint…”asset prices are dependent on investor expectations and the confidence in the policy makers and the effectiveness of their policies.” The continued weakness in all sectors – c’mon even my hardcore left-wing friends have to admit this “recovery” ain’t all that:
From a developer’s perspective, I would far rather build in a municipality that had strict barriers to entry and a grueling approval process but that when once your plans are approved, as long as you build according to the approved plans, you get your Use & Occupancy Permits. The alternative of a loose approval process coupled with an arbitrary inspection process leads to huge cost overruns and delays.
Let’s face it, Obamacare has passed and Dodd Frank has passed, but in both of these instances, the regulations are still being made up. So far, the regulations for Obamacare swamp the bill itself by a factor of 30. In the case of Dodd Frank, a whopping 28% of the regulations haven’t even been proposed! And, particularly in the case of Obamacare, it’s implementation is apparently subject to the whim and the (ahem, cough) political aim of the Administration. There is enough uncertainty in business to not have to worry about a constantly changing landscape.
But enough on that.
Contrary to a lot of the big brains one hears on the air today, I do not believe the U.S. is in decline. Let’s start with who will not “run the world” in the future. Most folks believe it is China’s destiny to do so and we hear a slew of yellow peril type stories as a result. I have always contended that demography is destiny. China is a demographic time bomb and you don’t have to dig too deep to reach that conclusion. One of the better pieces on the subject comes from Stratfor – here’s their take.
Next up, Russia. Yes, they are rattling their saber at the Ukraine as we write and there is not a lot the U.S. seems to be able to do about it. But Russia’s death rate far outstrips their birth rate and despite the best efforts of Vladimir Putin to get folks in the Motherland to canoodle together a little more, their future forecast is not bright. Lewis Grizzard once joked that he wasn’t afraid of any country that couldn’t master the flush toilet – not sure things have gotten any better in the Soviet err Russia – take a gander through the wonder that was the Sochi Olympics.
This is not to say that we are sans problems. We’ve got more than our fair share. In the near term, despite some sense of recovery in the housing market, we could be dealing with bubble issues soon. The single biggest problem that I see is cultural. The mathematics of deficit spending only work in the short term. Over the long term, the interest on the debt devours the edifice it was built upon.
Oh, and did I mention entitlements? That’s the cultural part. We are perilously close to that point where those that receive entitlements can out vote those that fund them. It is the two wolves and a sheep sharing a meal scenario.
It is far past time for some adult conversations – remember when your Mom and Dad told you “no,” or made you wait or earn something?
But despite all that, I really can’t think of anyplace else on earth than here for entrepreneurship, opportunity and the chance to do well than right here in the good old USA.
I’ve always enjoyed Steven Pressfield’s work – his novel “The Gates of Fire,” is a thrilling and highly educational account of the pivotal Battle of Thermopylae – which arguably saved Western Civilization.
I just polished off another of his books, “The Warrior Ethos,” a tour through the development of the warrior from the Spartans to the United States Marine Corps.
It’s been a long time since I donned the uniform, but I have not forgotten – nor does it ever leave you – the warrior mindset or “ethos:
Against the natural impulse to flee from danger (specifically from an armed and organized human enemy), the Warrior Ethos enlists three other equally innate and powerful human impulses: Shame. Honor. And love.
Veterans can have a hard time adjusting to the civilian world where the terms “shame,” “honor” and “love” are archaic constructs ill suited for the iPhoned world of ease. “At it’s heart,” Pressfield notes, “the warrior ethos is about self-discipline.”
I highly recommend this book to anyone who is a veteran – or is actively serving. I recommend it also to wives/husbands/significant others of military men and women. The book gives a brief glimpse into the warrior’s mind and would help the non-exposed better understand why they are a little “different.”
I still chuckle when I read that phrase – reminds me of the classic bit by Firesign Theater on the album “We’re All Bozos on this Bus.” “Don’t forget to inflate your shoes,” they warned. I’m always intrigued by futurists and their predictions – its particularly fun to look back at old predictions to see how they turned out. Remember this one:
One thing about futurists you can be sure of – they will probably be wrong. Nevertheless, it is a good mental exercise to fast forward into the future and anticipate what one might do to prepare for it. The latest issue of Urban Land magazine does just that with a good piece titled “Imagining Land Use in 2063.” It is worth the read to understand how some very smart people view current and future development patterns.
There is a lemming-like characteristic in real estate development – right now the rush is “in-fill” development. This is driven by two demographic trends: the baby boomers wanting to have a more vibrant retirement and not wanting to look “old” by moving into a Del Webb community and the baby boomlet generation that seems drawn to the “hipness” of in-town living. My personal feeling is that anytime everyone is rushing into a pattern is exactly the moment we just might be getting it wrong. I think the future will look a lot like the present – sorry, yawn, boring!
Sure, there will be more density. In Nashville alone, it is anticipated that we will add a million souls over the next 25 years. We are almost out of developable land, so the only solution will be a combination of density and sprawl…kind of like what we have now. My vision is the blend: a denser urban core coupled with a series of denser village-like suburbs. We will still have acre lot subdivisions although they will not maintain their value as they have in the past. The big losers, in my opinion, will be the McMansions. They don’t make good retirement options…a lot of the condominiums we sold from 2004-2009 were to people that were tired of the “2 acre lot” out in the burbs. They don’t subdivide well and are often prohibited in their Homeowner Association covenants from allowing multiple families or generations from living there. Inflexible is a bad characteristic of any real estate.
The big challenge will be managing the growth intelligently and having the municipal good sense to efficiently use ever scarcer public funds. We had a good discussion on this topic the other night on News Channel 5: The Future of Nashville.
What do you think? Jetsons or Beverly Hillbillies?
You don’t dare say the word out loud in the halls of an institutional lender yet, but some savvy developer types are figuring out that the supply and demand curves for “condominiums” has swung in the direction of under-supply. A report out by Costar Group states that there’s a “boomerang” back to condos due to the lack of supply.
The need is in the urban core of major cities and it is fed by a demographic of younger professional adults seeking the city lifestyle. I suspect that like the last boom (erang) there is an element of the demand coming from baby boomers with back aches from raking their acre lots out in the ‘burbs.
Rental rates are appreciating at a clip that turns everyone into an apartment developer, and like all trends (Apple stock?), there will be an upper limit and the for sale option will become more appealing.
Working against that is the searing experience that is still fresh among younger buyers who bought into the condo craze in 2006 and are still underwater on their too-hot mortgages. Against it too is the rising cost of construction driven by the boom in apartment construction. The same sub-contractor base builds both product types and both use drywall, wood and steel which are all facing upward pressure.
At the end of the day, the deal has to make sense. Whether it is an apartment, condo or town home platform, the basics have to be answered in the affirmative:
If these basics are met, it might be worth a trip to your local lender. Yell “Condo!!” loudly as you enter their office. If they react like you are the Joker about to rob the bank, better stick to your day job. If they smile and escort you in…you are either too late, or you came to the right place.
“I just wanted a condo loan…”
Range Light Partners 