Confessions of a Commercial Real Estate Consultant
View Cantera Consultants & Advisors Inc. recent consulting assignments
CCIM has just released the video interview with Greg Lindsay, author of Aerotropolis: The way we will live next from the CCIM Live 2011 conference held in Phoenix last month.
Earlier this year I wrote my review of this fabulous book which can be read here.
Greg’s powerpoint webinar from August 2011 is available at the CCIM website.
Last week I had the pleasure of introducing and interviewing Greg Lindsay, author of Aerotropolis. CCIM has just posted his webinar live.
Aerotropolis, the way we’ll live next
Authors: Greg Lindsay & John D. Kasarda,
Publishing Info: Farrar, Straus and Giroux, Nonfiction, First edition published March 1st, 2011
As an international instructor for the CCIM institute I discovered that the book, Aerotropolis: the way we’ll live next dovetails nicely with what the just-in-time delivery model as a primary driver of demand for industrial space that we teach in the CCIM 102 course, I would highly recommend it to anyone in commercial real estate.
As a rabid book consumer, I will easily digest about 100+ books a year, and without a doubt, Aerotroplis: the way we’ll live next has become not only my favorite book of this year, but one of my all time favorite business books. It is one of those rare books that I thoroughly enjoyed reading that I found myself moderating how much I could read daily so I can push the ending of the book out as long as possible.
My favorite magazine, The Economist recently offered a glowing review of Aereotroplis, stating “In Aerotropolis, John Kasarda of the University of North Carolina and his co-author, Greg Lindsay, convincingly put the airport at the centre of modern urban life.”
The theme of the book is that successful cities of the future will be wrapped around successful airports and those cities that can’t adapt may be passed by. Its authors state the books hypothesis as an equation related to time “The aerotropolis is a time machine. Time is the ultimately finite commodity setting the exchange rates for all the choices we make.”
Author and reporter, Greg Lindsay, expands and expounds on the John Kasarda’s original idea that airports are the highways of the future. As a former Fast Company and Wired magazine reporter, Mr. Lindsay racks up the frequent flyer miles talking with civic leaders, CEO’s and company logicians as he interviews them on their home turf about the importance of air transit to their communities, companies or supply chains future.
As a fellow traveler, I reminisced about Mr. Lindsay’s travels to well-known airports like Chicago’s O’Hare, Atlanta’s Hartsfield, Amsterdam’s Schiphol, or even Hong Kong’s International, but I was green with envy over his trips to Dubai’s Al Maktoum International Airport or South Korea’s Incheon airport and adjoining master planned Songdo International Business District. One story of Mr. Lindsay tracking his gift of flowers from the Aalsmeer flower auction in Amsterdam to his mother’s front porch will endear Mr. Lindsay to the reader as an extremely diligent reporter and respectful son. Even more surprising than his few thousand mile journey for flowers was his mother’s reaction.
Some of the books concepts in the book are eye opening such as “The world’s urban population is poised to nearly double by 2050, adding another three billion people to places like Chongqing. We will build more cities (and slums) in the next forty years than we did in the first nine thousand years of civilized existence. The United Nations predicts the vast majority will flood cities in Africa and Asia, especially China.”
Or this quote about South Korea “South Korea’s capital is the archetypal twentieth-century megacity, doubling in size every decade or so since 1950 to twenty-four million inhabitants—the second most populous on earth after greater Tokyo.”
Or my favorite quote about a Chinese based manufacturer: “We had barely crossed the border before he opened his laptop and began walking me through the true costs of those shipments. He’d built a widget calculating every conceivable variable: the weight, volume, value, and quantity of the products in question; the lead times for sourcing and building them; time spent in transit; their shelf life; the spread between paying his vendors and being paid himself; the cost of money in the meantime; and the cost of returns. An entire calculus, in other words, underlies the pivotal question of our era: What is the price of speed? The widget’s answer: slow is more expensive. The only thing faster than a FedEx 777 Freighter out of Hong Kong is the velocity of money, and the last thing Casey wants to pay for are the days his parcels are stuck on a boat. Obsolescence sets in the moment they leave the factory. “Revenue evaporation,” he calls it. “Air freight is key,” he muttered while running the numbers. “We like to work with products that can go by air. We build them in Shenzhen, and they’re in New York two days later. Time is often our number one currency, and the dollar is second.” ”
And this quote summarized the breath taking feelings I experienced in my many visits to China for CCIM’s education program: “China is placing the single biggest bet on aviation of any country, ever. Even before the crisis and China’s subsequent stimulus, the central government announced as part of its Eleventh Five-Year Plan that it would build a hundred new airports by 2020, at a cost of $62 billion. The first forty were ready last year. The vast majority lie inland, hugging provincial capitals and secondary cities bigger than any in the States. Full-scale aerotropoli are planned for China’s western hubs, Chongqing and Chengdu, and its ancient capital. Besides airports, China laid as many miles of high-speed railroad track in the last five years as Europe did in the last two decades. The trains, in turn, are meant to keep people off the highways, to which China’s adding thirty thousand miles—enough to eclipse the American interstate highway system. China’s planners have internalized the lessons of America’s Eisenhower-era infrastructure boom, designing a world-class system for moving people and goods quickly, cheaply, and reliably across any distance, whether locally by highway, regionally by rail, or globally by air. The plan is to pick up and move large swaths of the Delta hundreds or even thousands of miles inland. There is nothing to stop them.
And this quote on where the future global cities will be “Finding another five hundred million passengers 7should be easy. China has anywhere between 125 and 150 cities with populations greater than a million. The United States has nine; Europe, thirty-six. When the first phase of China’s airport-building boom is complete, the number of hubs handling thirty million passengers annually—more than Boston’s Logan or Washington’s Dulles—will have risen from three to thirteen, all of which will be the host of aerotropoli. By the time they’re finished in 2020, 82 percent of the population—1.5 billion people—will live within a ninety-minute drive of an airport, nearly twice the number today.”
The book dovetails nicely with some of my other favorite business reads like Marc Levinson’s “The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger” and Sasha Issenberg’s “The Sushi Economy: Globalization and the Making of a Modern Delicacy” both of which deal with just in time delivery and creating new markets.
Additional topics addressed in Aerotroplis include Peak Oil vs. Peak Food, globalization as a tool to pull the poor into the middle class vs. the carbon footprint of globalization via air travel, and the true cost of air travel in both economic and environmental terms.
If you enjoy Aerotroplis as much as I did, you might also read the June edition of Southwest Airline’s Spirit magazine as Mr. Lindsay has recently penned an article titled “Corporate Latter”. In this article he builds on the concepts discussed in Aerotroplis and discusses how technology has allowed us to shift away from being tied to an office, setting up shop at any location (http://www.spiritmag.com/click_this/article/the_corporate_latter/) . One economic development guru and author, Mark Lautman, is pushing this idea as the next evolution of cutting edge business recruitment – to scale down the benefits big corporations receive so communities can chase the highly mobile, quality of life comes first businessperson/consultant who eventually expands their business and hires staff. According to “When the Boomers Bail: A Community Economic Survival Guide”, this segment of our economic businesses is one of the fastest growing.
Not only would I highly recommend you read Aerotroplis, I would encourage you to purchase copies to share with your family, friends and clients as the conversations started from the concepts in the book are engaging, enlightening and very relevant to anyone with commercial real estate.
Todd Clarke CCIM
Aerotropolis can be purchased at: http://www.amazon.com/Aerotropolis-Way-Well-Live-Next/dp/0374100195/ref=sr_1_1?ie=UTF8&qid=1306590616&sr=8-1
A good friend, developer, proffesor and author friend of mine, Chris Lienberger, wrote a fabulous book titled “Option of Urbanism” a couple of years ago. One of the items I was stunned to learn is that GM designed and presented their vision of a future metropolis – centered around cars.
Some sixty years later, many of our cities resemble that comment.
It is interesting to see how some communities are dealing with this issue by designing parking structures that don’t resemble parking lots…
Thanks to Gizmodo.com for sharing with us this lot from VW and this automated lot in Russia complete with a photo gallery.
Those of you interested in Chris’s book can purchase it here:
Thanks to Anil Krishnamurthy for sending me my holiday read – Le Deal by J. Byrne Murphy.
Le Deal covers a well known American Developer who decided to expand into the European retail market. Le Deal gives great insight into the differences between development in Europe and America, and provides a handful of good laughs and great stores along the way – like this one from page 24:
Alan had his people run all the numbers and draw up the preliminary designs, and then trundled off to see the mayor of Hillsboro, to explain the concept, and to seek his support.
Alan told the mayor how the outlet would create four hundred new jobs, maybe six hundred if the center grew large enough. He estimated that there would be nearly five million dollars in property taxes flowing into his town’s coffers and four million shopping visits per year…
“ So Mr. Glen what do you want from me?” the Mayor asked at the end of the presentation.
“Well, Alan said, I want your support for the project, I’ll need zoning approval and a building permit to get started.”
The Mayor thought for a moment, then asked Alan, “May I see those drawings again?”
And when Alan unrolled the drawings, the mayor took out a pen and signed his name across the top of the first drawing, dated it, and said “Mr. Glen you just got your zoning approval and building permit – let’s get started.”
The whole interview, from beginning to end, had lasted less than an hour.
If you have an interest in how real estate in Europe differs from America, or in the back story on one of this country’s most successful outlet mall developers, I would highly recommended this book!
All referral proceeds from Amazon go to the CCIM Education Foundation.
Measuring America: How an Untamed Wilderness Shaped the United States and Fulfilled the Promise of Democracy by Andro Linklater
This book has turned out to be one of my favorite real estate reads. Although many of America’s founding fathers were surveyors (George Washington and Thomas Jefferson included) this book extends its reach much further than just surveying the United States of America.
Politics, measurement systems, legal systems and the history of the acquistion/annexation of the lands that make up our fair country are all wound up into one compelling story that is underpinnned by one fundamental ideal – that those who “own” property are likely to active particpants in a viable democracy.
Items of interest that I was pleased to discover in this book:
– A renaissance of knowledge and learning was the vibrantly cradling our world and the people of the time who pushed the boundaries of idea and thought.
– the metric system was based on nature, where as the current American and former British systems of measurement were based on man
– Prior to the adoption of standard measurements, measurements of land were often based on how much land one man could plough in a day
– Jefferson was one of the primary proponets of adoption of the Metric system
– the township and range divison of our country can be traced back to the surveyor’s chain
– the conversion of the 6 x6 township range to metric system (and thus all of the legal descriptions) would be all but impossible today
– Metes and Bounds (as in surveys) – actually was called Buttes and Bounds by Master (Surveyor) John Fitzherbet’s book, the Art of Husbandry, published in 1523 (p.7)
– The lack of standardized measurements was one of many components that our Congress debated in the creation of the founding papers that led to the creation of this country.
– Many of our original 13 colonies were founded as English Companies whose boundaries were described as latitudal numbers assuming the states ran from the Atlantic seaboard west to the Pacific Ocean (p. 30-31)
– In the early 1600’s, The Virginia company lost 6,000 of it’s 7,300 migrants and encouraged immigration by offering “headright” of 50 acres to anyone who would emigrate- by the 1630’s more people came to the state than those that perished in it, and those 50 acre parcel started to sell for about $1.25 per “headright”.
-Thomas Jefferson’s father, Peter Jefferson surveyed the southern boundary of 5 million acre estate of Lord Fairfax of Virginia (p. 38)
– George Washington at one point ownewd 52,000 acres across six states.
– The Viriginia Consitution drawn up in 1776 by George Mason read “That all men are by nature equally free and independent, and have certain inherent rights…namely, the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.” (p.48)
– “Democracy depended on getting the land into the hands of the people” (p. 72)
– Land bubbles were created and caused by the mismatch between demand and supply (p. 148)
– Patrick Henry created America’s first land trust in 1765, known as the North American Land Company.
– The Louisiana Purchased involved $15M and an unknown quantity of land, which once measured, indicated that USA paid France about 5 cents per acre.
– As the Federal Government encouraged homesteading, the “section” and measurement of couldn’t have been made any easier (a quarter section is approx. 250 “double paces” or 440 yards x 440 yards) (p. 169)
– Manhattan was subdivided in such a way to encourage growth and make it readily apparent where the city’s master plan was headed
– My home state, NM was exceedingly difficult to survey due to the land grants which had the 1890 surveyor general remarking “Certain title to the land is the foundation of all values. Enterprise in this Territory is greatly retarded because that foundation is so lacking” (“Handicapped by the absence of a market in land, the New Mexico economy was slow to develop before the twentieth century, and much of the capital then had to come from the outside.” (p. 221)
– The railroads were land developers and in the 1800’s sold about 120 million acres, outstripping the 80 million acres the USA offered as free homesteads (p.228)
If any of the above tidbits whet your appetite to learn more about how our country grew, I would highly recommend this read.
* Link is a referal program to Amazon.com – any proceeds from book purchases are donated to the CCIM Education Foundation