“I see young guys that are now chief acquisition officers, and they don't know what a true real estate cycle is and that scares the hell out of me,” stated a lender at the Commercial Mortgage Securities Association's CMBS Investors Conference in Miami last month.

If that remark doesn't send a déjà-vu shudder down your spine, perhaps you have forgotten how a few grizzled Wall Street veterans sounded a similar alarm when the dot.com bubble was expanding. The young MBAs who were underwriting hot start-ups and managing Internet funds, they warned, had never seen a bear market. Therefore, they could convince themselves that the riches accumulating in tech assets represented a “new paradigm,” and were not part of a normal investment cycle. Indeed, as real estate investors who lived through the 1990s can attest, while all the big bets were being placed on the “new economy,” the value of office buildings, apartment houses and malls was falling. In this decade, the cycle has swung back to real estate. In fact, so much money has poured into commercial property that the consensus among panelists at one session at the conference seemed to be that so much money has poured into the sector that commercial property in the U.S. — and in other parts of the world — is now “priced for perfection.” That also should give us pause.

Soon, it seems, we will see if the young guns of commercial real estate investing can do better than those cocky dot.com investors. As they compete ever more fiercely to finance deals, can they exercise restraint if they can't summon the mental picture of unfinished buildings, unrented stores and bankruptcy auctions?

Ironically, the tech bubble is partially to blame for the dearth of 40-somethings on the front lines of commercial real estate. As the compensation experts we talked to for this month's cover story point out, a talent gap began to appear in commercial real estate in the late 1980s and early 1990s, when ambitious MBAs headed for Silicon Valley and Wall Street investment banks. Real estate lacked glamour; the biggest investors were insurance companies.

All that has changed, of course, and ambitious young men and women have been drawn to the challenges and the potential rewards of the contemporary finance-driven commercial real estate industry. But, with an unprecedented level of money seeking returns in real estate, there are not enough of these vice presidents and directors of development to go around. Recent graduates are moving up the ranks at an accelerated pace. What worries some industry executives is that there aren't enough people in positions of authority who have sufficient respect for the risks.

For now, the talent gap is producing a happy effect for many of our readers: Their salaries are rising. But at what future costs?

SADI: New and Improved

We've been getting a lot of calls of late asking us about our annual Superior Achievement in Design and Imaging awards. Traditionally, our entry deadlines have been early in the year with awards handed out in May.

But this year we've decided to change things a little. We're pushing our awards back — to September. That will couple SADI with our annual Leaders in Retail Architecture package, making that issue even more of an essential read for spotting the top design trends and leading firms in designing retail real estate projects.

We're also overhauling the awards ceremony itself. Rather than having it in Las Vegas amidst the madness associated with the ICSC Spring Convention, we're working toward a bigger and better event to be held this fall. It will give the awards and the winners a new showcase.

The SADI application forms are now available on our Web site. (Look for details on page 49.) The new deadline for entries is May 31.

We appreciate all the inquiries we've already received. Now it's time for you to jump in and tell us about top projects we should consider for this year's honors. We're looking to make the 18th Annual SADI awards the best yet.