The office market is going to improve, and Richmond will be one of the first areas to see that improvement.
Four REIT executives saved that nugget for last, telling 250 attendees at a GRACRE event Tuesday night that conditions are slowly improving and that they all hope to invest more in Richmond, although not necessarily immediately.
“All the right ingredients are here, and you will find things much better in 2012 and 2013,” said Gerard Sweeney, CEO of Brandywine Realty Trust.
Sweeney was joined at the Country Club of Virginia by executives from three other REITS that have office buildings in Richmond. The discussion was candid and at times humorous.
Ed Fritsch, the CEO at Highwoods Properties, said that the economy is bouncing along the bottom and that he expects the volume of investment sales to increase in coming years for second-tier cities such as Richmond.
All four executives said they have capital to invest in Richmond and would prefer to add properties in the markets they already operate in than in new locations.
There are a few factors that are slowing down a recovery, the panelists said. One major impediment is uncertainty about future taxes and legislation. Robert Fenza, the COO at Liberty Property Trust, said that more projects would come online sooner if local governments helped expedite the building process. “I’d love to see more innovation and them [local governments] speed up new incentives.”
Fritsch said businesses need more clarity: “How can businesses make decisions when they don’t know the tax rate of health-care costs in six months?”
James Dawson, a COO at First Potomac Realty Trust, said that businesses need to know the rules of engagement before they can plan or spend.
“This is a huge pain on our clients,” he said.
The panelists, prompted by moderator and VCU professor David Downs, also explained how each of their firms became REITS and then opened up about their investment goals and strategies. Fenza, being a public company also added some virtue.
“Our chairman likes the transparency,” Fenza said. “He liked that analysts are looking in your underwear drawer.”
But having shareholders comes with some additional pressure, said Sweeney. “There is a downside: You are constantly balancing the tensions of building long-term value versus short-term earnings and the stock price,” Sweeney said.
Fritsch summed it up this way: “You always have masters to serve.”
The panelists also seemed to agree that the office market is about knowing how to treat tenants and how to find the right vendors to help run the business.
Fenza said that his firm rarely hired a firm with the lowest bid. Instead they want a locally based company, he said, adding that when the economy tanked and Liberty needed to find ways of saving money, Liberty’s vendors volunteered ways to cut costs.
For Highwoods, that ethos leads to some language choices. For example, Fritsch said Highwoods calls tenants “customers.”
“You treat them differently — the way we want to be treated,” he said.
Aaron Kremer is the BizSense editor. Please send news tips to [email protected].
The office market is going to improve, and Richmond will be one of the first areas to see that improvement.
Four REIT executives saved that nugget for last, telling 250 attendees at a GRACRE event Tuesday night that conditions are slowly improving and that they all hope to invest more in Richmond, although not necessarily immediately.
“All the right ingredients are here, and you will find things much better in 2012 and 2013,” said Gerard Sweeney, CEO of Brandywine Realty Trust.
Sweeney was joined at the Country Club of Virginia by executives from three other REITS that have office buildings in Richmond. The discussion was candid and at times humorous.
Ed Fritsch, the CEO at Highwoods Properties, said that the economy is bouncing along the bottom and that he expects the volume of investment sales to increase in coming years for second-tier cities such as Richmond.
All four executives said they have capital to invest in Richmond and would prefer to add properties in the markets they already operate in than in new locations.
There are a few factors that are slowing down a recovery, the panelists said. One major impediment is uncertainty about future taxes and legislation. Robert Fenza, the COO at Liberty Property Trust, said that more projects would come online sooner if local governments helped expedite the building process. “I’d love to see more innovation and them [local governments] speed up new incentives.”
Fritsch said businesses need more clarity: “How can businesses make decisions when they don’t know the tax rate of health-care costs in six months?”
James Dawson, a COO at First Potomac Realty Trust, said that businesses need to know the rules of engagement before they can plan or spend.
“This is a huge pain on our clients,” he said.
The panelists, prompted by moderator and VCU professor David Downs, also explained how each of their firms became REITS and then opened up about their investment goals and strategies. Fenza, being a public company also added some virtue.
“Our chairman likes the transparency,” Fenza said. “He liked that analysts are looking in your underwear drawer.”
But having shareholders comes with some additional pressure, said Sweeney. “There is a downside: You are constantly balancing the tensions of building long-term value versus short-term earnings and the stock price,” Sweeney said.
Fritsch summed it up this way: “You always have masters to serve.”
The panelists also seemed to agree that the office market is about knowing how to treat tenants and how to find the right vendors to help run the business.
Fenza said that his firm rarely hired a firm with the lowest bid. Instead they want a locally based company, he said, adding that when the economy tanked and Liberty needed to find ways of saving money, Liberty’s vendors volunteered ways to cut costs.
For Highwoods, that ethos leads to some language choices. For example, Fritsch said Highwoods calls tenants “customers.”
“You treat them differently — the way we want to be treated,” he said.
Aaron Kremer is the BizSense editor. Please send news tips to [email protected].
I guess this panel could be spun two ways. Either “the environment is getting better and you can expect a better ’12 and ’13” or “at least 18 more months of difficult times”.