Paths for Leadership Pondered at ULI Summit

Whatever their regions or business lines, all commercial real estate executives face the same fundamental question

Boston–Whatever their regions or business lines, all commercial real estate executives face the same fundamental question: what is the best way to move forward in this promising but still highly unsettled market? At the Urban Land Institute’s spring conference in Boston this week, many participants searched for answers.

Some industry leaders challenged their peers to approach their business with fresh eyes. “The single thing that I think all of us have to keep in mind is that we’re really in a long-term industry,” said ULI chairman Jeremy Newsum during an interview with MHN on Thursday afternoon. “I think there’s a responsibility on leaders to provide the judgment. That may mean you give something up in the short term” in the interest of a greater long-term benefit.  Newsum, who served as chief executive of Grosvenor from 1989 to 2008, specified two strategies that he believes are highly desirable. First,  far less reliance on debt than there was in the previous cycle. And second, “I would hope we would see more diverse businesses able to cope with cyclical changes.”

The Fortune senior editor and business pundit Geoffrey Colvin drew lessons from Wednesday’s news that Morgan Stanley may have lost $5.4 billion on its real estate investments. For commercial real estate’s decision-makers, the message is clear: “The ability to understand the risks that others don’t see is going to be increasingly important for everyone in this business,” Colvin declared. “It is always when the risks appear least that they are the most.”

Colvin also took a cue from Bank of America’s hiring of Northrop Grumman executive Charles Noski as its new chief financial officer. Noski’s appointment struck Colvin as a reminder that times of economic transition offer rare opportunities to upgrade talent. As Colvin put it, “It is also a great time to steal great performers, because they are available like they never are” otherwise. Finally, mentioning a story about creative entrepreneurship, Colvin reminded his listeners that success involves thinking more deeply about customers’ changing problems than competitors do—then inventing solutions.

Leadership was also the theme of one of several day-long, interactive roundtables on Thursday. Moderated by Lynn Thurber, chairman of LaSalle Investment Management, and Mayhood Co. president David Mayhood, the wide-ranging session touched on issues ranging from the structure of real estate organizations to leadership succession. One session participant ticked off a series of qualities that make a good CEO, such as a strong background in finance and top-notch management skills.  “Dealmakers don’t always make great CEOs,” the participant commented. “You need people who are player-coaches, who are good managers.”