Over the last half of the 1990s, many industry predictions have come true. The real estate industry has been affected by securitization, globalization, consolidation and the expansion of technology. We have witnessed many smaller or highly specialized firms combine resources to stay competitive and extend geographic coverage in an increasingly sophisticated industry. Firms with roots in the United States have expanded their efforts overseas, not only to develop new relationships, but also to continue to meet the needs of existing clients. Technology continues to improve our access to information and our ways of doing business.

Beyond the year 2000 and well into the next decade, these topics will no doubt continue to be important, but their dimensions will change and their impact on the real estate industry will shift. New trends in securitization, globalization and the rise of the virtual organization will be added to the list of drivers that will shape the industry - and the role of its leaders - in the next millennium.

In coming years, securitization will expand across the globe with worldwide investment in publicly traded debt and equity, similar to growth of CMBS and REITs in the United States. Two factors that will contribute to this trend are the Euro and the likely passage of International Accounting Standards for real estate accounting and reporting. If international standards are adopted, fair value accounting is expected to be the norm, which will facilitate an even more efficient flow of capital.

Although the term "globalization" has been used among those in the real estate industry for some time, the majority of international efforts to date have centered around North America and Europe. As we enter a new decade, the term "globalization" will more closely reflect its true meaning. Expansion and growth abroad will encompass more markets with much more diverse cultural and economic conditions.

The new frontiers that will be of particular interest include Southeast Asia, China, portions of Eastern Europe and South America. Within the next decade, we may even see renewed interest in Cuba if a market economy takes hold. Cuba will once again become a hot tourist destination for Americans, resulting in a flurry of real estate development and foreign investment.

We have already seen a dramatic trend toward management of information in the real estate industry. In the next decade, the importance of managing information could surpass the importance placed on managing physical space, such as offices and headquarters facilities. Virtual organizations will flourish in coming years, often stemming from unlikely partnerships among investors, developers, asset managers and a multitude of service providers. This will result in unprecedented solutions to complex organizational change.

As individuals and corporations adapt to new ways of doing business in a virtual workplace - e.g. more outsourcing; less attachment to offices; greater use of technology - adaptive re-use of properties and customization of space will address these changes.Although office space will still be necessary, space functions will need to be re-examined. Workplaces will need to be equipped with the appropriate technology enhancements to keep them attractive to tenants. E-commerce will throw greater emphasis on more efficient warehousing and distribution facilities. The retail sector, still closely watching to determine the effects that e-commerce will have on physical stores, may need to rethink facilities and location strategies.

The growth of e-commerce will not only demand the analysis and reengineering of space usage, it will also help accelerate the entire real estate cycle. From designers and developers to asset managers and investors, all parties involved in real estate will have more information than ever before. With the magnitude of information and market research becoming overwhelming to decision makers, effective management and thorough analysis of data will be the keys to success.

The amount of change that technology will bring about will be astounding. For instance, applications outsourcing of property management systems onto Websites will enable property managers of both corporate and investment properties to create fundamentally different relationships with their customers and suppliers. Business intelligence applications will provide knowledge-based decision tools that allow owners and managers to manage the day-to-day performance of their portfolios as easily as a parent monitors a baby's room today.

In particular, real estate investment professionals now demand a more quantitatively focused research process. Tightening yields and rapid cycle times in the capital markets are making the price of shooting from the hip far too high when an investment does not work out. The elimination of time and space barriers means that more disparate investors can come together to make deals quicker, regardless of physical boundaries.

Real estate leaders of the future will need to develop new management skills to adapt to this changing environment. For example, as U.S. interest in new regions grows, unfamiliar legal restrictions, resource shortages and infrastructure barriers will be encountered. Global teams, comprised of members organized around projects rather than functions, will be best suited to address these issues. The ability to organize, motivate and lead a global team toward common goals will not be an advantage - it will be a necessity.

Corporations with global strategies will require leaders with a broader view of their organization's objectives. Those who can provide innovative, creative solutions to new challenges will thrive. To accomplish objectives and minimize costs, they must be willing to give up control of their traditional responsibilities. Cross-functional experience will help real estate executives understand the larger context in which they operate.

Factors such as the growth of e-commerce, greater availability and speed of information, changing management skills and an ever-increasing interest in new global markets will challenge real estate leaders in coming years. Those who meet the challenges will find new opportunities for success.