Real Estate Titans Say Don’t Bet on the Death of Cities

Tishman Speyer Properties President Rob Speyer and Brookfield Asset Management Inc. CEO Bruce Flatt discuss the prospects for commercial real estate during a panel discussion moderated by Bloomberg’s Carol Massar at the Qatar Economic Forum. Real estate titans Tishman and Brookfield have invested billions snapping up discounted offices and other commercial buildings since the start of the Covid-19 pandemic. Watch below for an excerpt of the interview.

“The true value investments today and where big money can be put to work, and where significant value can be made is buying into these great cities today…”

 

Speyer: In my lifetime, I’m 51, five times, and I’ve spent my whole life in New York, five times, people have been predicting the death of New York and the death of cities, and every time they’ve been not just wrong, they’ve been profoundly wrong. And through crisis, New York and other big cities have innovated and made themselves better. And that’s been happening not just for 51 years, but for hundreds of years.

Massar: But even though companies are increasingly saying as a perk to hiring and we’re hearing this in massive surveys, employment surveys, that now a perk, you can work anywhere you want, that that is going to we know people are leaving jobs if they don’t have that flexibility. That doesn’t change things?

Speyer: We’re also having companies say that if you leave your salary is going to be adjusted to reflect the cost of living where you’re moving to. So I don’t think we’re going to fully understand those demographic trends until you see where people end up on the other side of it. And again, if we were together. And you looked outside my window or you went to Central Park, I don’t think you would be doubting the future of New York. And the same would be true if we were in Paris, London, Tokyo, Toronto or Doha.

Massar: Bruce come on in on this, because I do wonder, like logistics centers, data centers, is that more attractive? Is there something that’s more attractive now that we’ve gone through the pandemic?

Flatt: What Rob should have said about his residential is he had some projects in London that he could sell to people that are listening to this call at first. But I’ll do it. Pitch for him. Look, here’s what I would say. There’s no doubt the one sector and we’ve been investing significant amounts of money in and over the past seven, eight years, data center didn’t exist really 15 years ago. There’s enormous amounts of money going into the data center business. And it’s going to continue for a long period of time. But when you look at the amount of capital in that area or in science or in some of these niche areas, they’re phenomenal investments and they have been great investments and they will be in the future. But they’re relatively small dollars globally. And so, yes, they are great investments. But the true value investments today and where big money can be put to work, and where significant value can be made is buying into these great cities today when people are having a different, more pessimistic view of them.

*Bloomberg contributed to this content

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