CHICAGO - When the International Association of Industrial and Office Properties (NAIOP) holds its annual conference in Seattle, Wash., Oct. 5-8 this year, some of America's brightest real estate minds will share their thoughts and ideas on the state of the industry.
Among them will be Timothy Callahan, president and CEO of Equity Office Properties Trust, the nation's largest publicly traded real estate investment trust, who delivers the keynote address on Oct. 7.
We caught up to Callahan for a sneak preview of his NAIOP speech - E-commerce and its impact on commercial office space. He also discussed EOP's recent deal with Regus Business Centres to place flexible office centers in each of its properties.
NREI: How will e-commerce affect traditional office space? Many of the changes we'll see in the next three to five years are difficult to anticipate. The Internet is redefining industries, companies and job positions across the board. Our strategy to succeed in this shifting environment is to make the changes work for our customers and for Equity Office.
We don't anticipate that E-commerce will reduce our customers' needs for office space. Rather, we believe we'll see a shift in the way that space is used. We are committed to the ongoing dialog with our customers that will help us anticipate their changing needs.
As workspace needs diversify, flexibility will become an increasingly important element to businesses. The size, scope and operating expertise of Equity Office enables us to present customers with solutions to the ongoing challenges of working in this new economy. We see the yet undefined impact of E-commerce on companies as an opportunity to further establish our commitment to helping our customers succeed.
NREI: Why did you do the deal with Regus? Regus provides us with another dimension to the problem-solving we offer our customers. In a rapidly changing environment, instant offices can answer a myriad of needs - companies that need an immediate presence in a new market or "just in time" space for project teams. Regus also provides sophisticated business services, such as training facilities, video conferencing technology and cyber cafes.
We will continue to partner with best-in-class providers to consistently broaden our menu of customer services.
NREI: How will E-commerce and technology affect how owners of large office portfolios will do business in the future? E-commerce is already affecting how we do business. For example, we've seen a tremendous increase in the interest of third-party brokers to receive communication via e-mail. The immediacy the Internet brings to the table in lease negotiations can provide strong benefits to all parties involved.
Last month our leasing director in San Francisco issued an e-mail to local brokers about a full floor we had available at 301 Howard Street. By the end of the day there were seven requests for more information. One month to the day later, a tenant moved in.
This scenario is a simple illustration of the impact technology will have on the timing and cost of transactions. Businesses across all industries are using technology to increase productivity. Equity Office looks to best practices across Corporate America in all aspects of our business, from accounting systems to internal communications, to ensure a high-quality service level coast to coast
In the July issue of NATIONAL REAL ESTATE INVESTOR, two firms were omitted from our Property Management Survey on p. 58. Had they been included, Houston-based PM Realty Group would have ranked #9, while Chicago-based Transwestern Commercial Services would have ranked #13.
PM Realty Group 910 Travis St., Ste. 1000
Houston, TX 77002
(713) 209-5800, Fax: (713) 209-5782
Total sq. ft. under management: 115,000,000
Company officers: Rick V. Kirk, president; James C. Gunn, EVP, property services; J. Ernest Johnson, EVP, corporate services.
Transwestern Commercial Services 150 N. Wacker Drive Chicago, IL 60606 (312) 499-1900, Fax (312) 499-1904
Total sq. ft. under management: 70,500,000
Company officers: Randy Lowe, chairman;
Jack Eimer, president & CEO; Larry Heard, president, Southwest division; Paul Lentz, president, Western division; Tom
Nordlinger, president, Mid-Atlantic division; Van Pell, president, Midwest division; James I. Clark III, president, investment services;
Ken Sandstad, president, corporate advisory services.
Also in the property management survey, on p. 63, the 48th entry should have read Morton G. Thalhimer Inc.*ONCOR International.