exporeal.net - INTERVIEWS

The Urban Land Institute ULI is a renown and respected global institution in the
real estate industry. Bill Kistler, President of ULI Europe, was interviewed by
Andreas Schiller.

Photo: Bill Kistler, President of Urban Land Institute ULI Europe

Lets start with a personal question. How long has the President of ULI Europe been with the organization, and what were the most notable trends during that time?
Bill Kistler: I have been a member for 20 years. Most of this time I have been in Europe, and I have watched the Urban Land Institute go from being essentially US focussed to becoming a truly international organization. We have gone from a few hundred members outside the United States to now over 3,000. By far the fastest growing sector within ULI is its international membership. That is measured in countries. We used to be – again a decade ago – something like 25 countries. We now have members in 87 countries. For me, that is very exciting, because it parallels what happened with our industry. In many ways, ULI follows its members. We like to say our programme and agenda is determined by our members, and our members are very much globalizing.

Then what is the role of ULI Europe? In terms of globalization, what do you think are the important issues for the real estate industry, especially in Europe? And how is ULI Europe dealing with it?
Bill Kistler: It is quite a challenge for us. There are so many big issues. I think the benefit that ULI brings is to try to find the issues that underlie the diverse sectors of our industry. You have lots of people—architects, bankers, investors, developers—and organizations focusing just on financial issues or design issues. What ULI does, is to look at the big picture—issues where it does not matter whether you are a banker, planner or architect. For example, what makes cities sustainable? What makes them successful in the long terms? In other words, understanding the competitive forces that are driving policy decisions in the cities, and understanding the differences between successful cities and struggling cities.

So, I guess there is a big cross-over approach in Europe. For example, the Germans can learn something from the UK or the other way around; we can share our knowledge with some countries in Central and Eastern Europe, and so on.
Bill Kistler: Absolutely! I have been living in Europe since 1980. I watched the borders slowly dissolve. However, another part is that it is not unique to Europe; the US also suffers from strong national pride. You like to think that you don’t necessarily have a lot to learn from others. Certainly, that is how most people felt 15 years ago. Whether they were German, French, British or American, they kind of felt that their ways were the best. So, I think we have recognized over the last decade that we have a lot to learn from each other. We are not talking about just going across the borders to conquer new markets. Maybe these people are doing something that is different but also better. I can learn from it and take it back to my market place. That to me is one of the biggest benefits of that kind of integration of our industry in Europe.

You recently returned from a trip to India and other countries in Asia: How much do you feel that the topic of sustainable development is important in these countries, too?
Bill Kistler: It is even more important because they are growing so rapidly. There is an opportunity to be very successful or make very big mistakes. However, the issue is very different country by country. Certainly, China is the great case study, where they affect energy prices world wide because of their demand for energy. Nevertheless, they have the chance to learn from our mistakes in North America and in Europe, and build cities that are more sustainable. In fact, I can understand that they would repeat some of our mistakes. From a sustainability standpoint, we should do our best to make sure that our colleagues around the world are thinking about the same issues and learning from our mistakes. Many of our members are pouring into these markets.

Photo: ULI Chairman Marilyn J. Taylor, Partner of Skidmore, Owings & Merrill LLP in New York, was a speaker at ULI Europe's spring conference 2006.

But, doesn’t Asian tradition have a closer or different relationship to nature and the environment than we do? Just think of Chinese acupuncture in medicine, or the buildings that are thousands of centuries old. Do you agree that sustainability can also mean going back to the traditional roots of the Asian world?
Bill Kistler: They have great traditions. They learn quickly from us, but also from themselves. They are really going to be the dominant force economically and otherwise. A story that came out of a conference recently was interesting. A guy was talking about a presentation he made about a project in Korea. It was an elevated highway running through a river valley, and they decided to get rid off it. They showed the before and after pictures to a Chinese audience, who actually thought the picture with the highway was the good picture and not the bad picture! Their view was that the highway represented modernity and progress, and that the picture without the highway was backward and primitive. It was a very interesting difference of perspective. The Koreans had already been through the cycle and realized what was important for preserving the environment. The Chinese are trying so hard to be seen on the world stage as a progressive, modern country that, for them, “taller, bigger, better, more” is progress.

Moving our attention from geographical diversification to diversification in investment vehicles: There are many discussions about REITs, derivatives and hedge funds up-and-coming; and we see a lot of financial driven opportunistic funds. But what is the role of real estate?
Bill Kistler: The fact is that, as the funding and financing structures become more
sophisticated, the danger increases of losing sight of the underlying
fundamentals. What represents a good real estate asset, a good market, or a bad
market? What makes real estate so wonderful is that it is very complex. It is
both: an art and a science. You know that is why people are addicted to it and
love it. At the same time, that is what makes it different from bonds, equities,
and other things. In the end, the art form of the real estate business is what
really matters. Unfortunately, that is something that is very difficult to
teach.