Perhaps no architect has impacted the urban landscape as much as Cesar Pelli. Most notably, he is known for his modern interpretations of the skyscraper, many of which grace CBDs the world over, So do his libraries and education buildings and medical facilities, and...

Here is an icon himself, who at age 68 has just received the 1995 Gold Medal from the American Institute of Architects (AIA), the highest honor awarded to any architect. His firm, Cesar Pelli & Associates of New Haven, Conn., won the AIA's Gold Medal for Firm of the Year in 1989.

But unlike many in his profession, he is modest, charming and down-to-earth in his analysis of real estate. He has always been thought of as a "contextualist," an architect who takes pains to "fit his buildings into the urban fabric," he says, with designs often recalling the intricate cladding and setbacks of the 1920s and 1930s. "Some architects just plop a building down in the middle of a city, and to them it is a piece of art. But that is a building that draws attention to itself, not to anything around it. Unfortunately, some buildings only relate to themselves."

That's why developer clients like Gerald Hines, Miglin-Beitler, Lincoln Property Co., Olympia & York and others like working with Pelli. He delivers the goods, in "name" buildings that are both architecturally and economically sound. On the user side of the equation, to say you are a tenant in a Pelli building is to have cache in your office address.

Now that Pelli has all those millions of square feet of space under his belt, who better to ask about the state of the modern office building? With telecommuting, hoteling and other nomenclatures abounding, his is a unique perspective on the office of the future.

"The development of social ways of working and behaving is a very complicated three-dimensional curve wiggling all over the place," says Pelli. "After World War 11, the prediction was that everyone would have a helicopter in their backyard. That is how we would all travel. That's just one minor example of how projections are not always accurate.

"I don't really believe at all that everybody will be working at home. Obviously it is going to increase, with more and more people doing business away from the office. How many will do it? I don't believe it will ever be 50%. As soon as it becomes easy to do some people do it. I don't know if people will work in their house or they will travel more. People are working further and further away. As transportation becomes easier more people will do it. The more these types of barriers are lowered, the more people will move across those barriers." So here's the bottom line according to Pelli. "There will always be a need to maintain themselves somehow in a collective project with other people. I find it difficult to work intensively if I am by myself. When I am in the context of my office, with many people around asking me questions, working together to solve problems, then I work very intensively."

So far, that intensity has led to some striking office skyscrapers. Does that mean we'll be seeing more spec building in the near future? "The market fbr spec office buildings will start to come back in some areas, but very carefully because many developers have been killed," says Pelli. "Most large cities do not have large blocks of space, say 500,000 sq. ft., available to one tenant."

In his own recent designs, at least those since the 1970s, Pelli feels the buildings are flexible enough to accommodate new technologies, such as voice and data wiring, for the foreseeable future. seeing that they're acting like domestic investors, meaning that they are asking for the same return and that they are a lot more savvy and intelligent about the market today than they were before." She says two types of capital is flowing into U.S. real estate from overseas -- entrepreneurial and institutional.

"Foreign institutional capital is very much like institutional capital in the United States today. Entrepreneurial capital has always been risk-oriented," Feldhaus says. "We are also seeing some Wall Street firms going to Europe and introducing the concept of securitization, primarily in England."

Feldhaus says it's hard to quantify how much foreign capital is entrepreneurial and how much is institutional, but most European funds remain institutional.

The real estate capital coming from Latin American and Asian countries, such as Taiwan, Hong Kong and China, is entrepreneurial in nature.

John Coppedge, director of European/Asian operations of Cushman Wakefield's London office, says most money invested in European real estate also has been coming from pension funds and insurance companies.

Some of the U.S. funds investing abroad may have been more focused, he says, but a large number of them have been investing just for the sake of investing in foreign markets'

"There are going to be funds that make investments here because you have to be global," Coppedge says. "European funds are much more accustomed to international investments. It's not a cultural barrier for Europeans to go overseas. It's difficult for U.S. funds to invest 5,000 miles away."

German, Dutch and British pension funds have invested heavily in the United States for a long time and seem to follow that trend, he says.

"Even Europeans have their bad share of investing in the United States, but they know it's a cyclical business," Coppedge says.

He says that most Dutch and German funds have approximately 10% to 15% of their investments in real estate as compared with just 5% of U.S. pension funds' money going into real estate.

"These European funds are very active in U.S. real estate," Coppedge says. "Most of them make the investment and keep it there. They don't repatriate. They wait for the currency to be favorable before repatriation."

He says a lot of individual and entrepreneurial money is coming from the Asia Pacific region into both the U.S. and European real estate markets.

"It's very difficult to trace Middle Eastern money because a lot of that type of investment is made through lawyers and banks," Coppedge says. "They have been much more active in the past 18 months in Europe."

Jim Montanari, managing director of the national investment advisory group of Cushman & Wakefield, says European funds have started once again to invest in the United States.

"Yields that are available here are much more attractive than Europe," Montanari says. "There are more investment opportunities in the United States. I don't think the exchange rate is the primary motivating factor."

Most international funds tend to be conservative investors, he says, and would expect to achieve between 2% and 2.5% higher than between 6% and 7.5% in their home markets.

"They would generally expect a yield of 9% or above," says Montanari.

Eagle of MIT says that pension funds are investing in different countries because they want to diversify their portfolios.

"British pension funds don't want to bet on the British economy; German funds don't want to bet on the German economy; U.S. funds don't want to bet on the U.S. economy," Eagle says.