The third edition of Professional Real Estate Development: The ULI Guide to the Business is the culmination of four years of work begun in 2008. As did the previous two, this third edition benefits from over 100 new interviews, all new case studies, and new spreadsheets reflecting current rents, costs, and taxation.
Since the new edition’s inception, the world has gone through the global financial crisis and the United States has experienced the deepest recession since the Great Depression. Interestingly, the book’s first publication in 1992 dealt extensively with the S&L crisis of the late 1980s. A constant theme emphasized by many of the contributors to the new edition is how they have dealt with the enormous consequences for real estate from the economic cycles.
In every sense of the word, this book is a cooperative effort. I have been blessed with wonderful students over the years at Harvard and previously at the University of Southern California. This edition is the collaboration of three of my best former students at Harvard: David Hamilton, Sofia Dermisi, and Alex Duval. David Hamilton is fully my coauthor. Indeed, he has taken the lead on updating a majority of the chapters. Each of the product chapters has been revised by a single author. David Hamilton revised chapter 3 on land development, a chapter to which he contributed significantly in the previous edition. I focused on multifamily residential development in chapter 4. Sofia Dermisi revised chapter 5 on office development. And Alex Duval revised chapter 6 on industrial development. Nick Egelanian, a retail consultant, revised chapter 7 on retail development. Each chapter has entirely new case studies, updated exhibits, financial information, and spreadsheets. I would also like to acknowledge Wynne Mun’s work on the spreadsheets in chapter 4. He brought his extraordinary talents to bear on both the programming and the presentation of the five stages of analysis.
David and I are forever grateful to Adrienne Schmitz, who not only is the official ULI editor of the book but also has guided the book’s development at every step of the way. The current edition stands on the shoulders of the two previous editions. The handiwork of my previous ULI editors and coauthors—Anne Frej and Dean Schwanke—is evident throughout the new book. They bear no responsibility for errors or omissions in the latest edition, but the new edition would not be what it is without their enormous contributions.
David and I have relied on the help of a series of research assistants from among my best students at Harvard Graduate School of Design. Sara Lu, Corey Zehngebot, and Lily Gray did admirable work on interviews with developers, preparation of the apartment case study, and follow-up of editorial questions. GSD doctoral candidate Kristen Hunter did a superlative job of conducting and compiling numerous interviews for chapter 4, and with Arianna Sacks updated the industry-wide survey presented throughout chapter 1.
David also wishes to thank a number of industry leaders and young professionals who answered his question “what’s happening now in real estate?” when it seemed every potential answer might be proved wrong by the next week’s unprecedented events. Zvi Barzilay, Steve Kellenberg, and Elizabeth Plater-Zyberk shared their insights on new residential communities. David Goldberg, Stewart Fahmy, and Matt Kiefer contributed on regulatory and entitlement issues. Chris Lewis updated our compensation survey. Judi Schweitzer and Joel Kotkin educated the authors on demographic and market trends; Toni Alexander and Chad Rowe updated our thinking on sales and marketing. Rob Bowman and John Fullmer of Charter Homes and Kevin Wronske of the Heyday Partnership contributed their excellent professional projects to the financial analysis and development case studies in chapter 3. John Knott, Buzz McCoy, and Don Killoren each offered a depth of insight commensurate with their reputations and too broadly influential on the text to cite here. Finally, David wishes to thank his wife Hillary for her support and forbearance during this project, which has been as stimulating as it was daunting. After two years of interviews, David wishes to report that the leadership in our field is strong and intellectually engaged with the issues of the day, and is looking forward to the opportunities of the coming decade.
Sofia Dermisi wishes to thank Dan Schuetz for the Denver case study and Debbie Moore, Jess Arnold, and Natasha Dasher for the Houston case study in the office chapter. Alex Duval would like to acknowledge the outstanding help of Thomas Gibson and Allen Arender of Holladay Properties for the case study in the industrial chapter and the input of Jay Puckhaber on many other issues in the chapter. Nick Egelanian is grateful to Roy Higgs, Nick Jaravis, James McCandless, William Shewalter, Yaromir Steiner, and Paul Vogel for pulling together information and offering their guidance and expertise.
As in previous editions, I owe a tremendous debt to friends and mentors from ULI. Some of them are no longer with us—Charlie Shaw, Harry Newman, Bob Baldwin, and Charlie Grossman in particular. This book reflects the wisdom of a number of industry giants whom I have been privileged to know—Gerald Hines, Joe O’Connor, Jim Chaffin, Stan Ross, and Buzz McCoy—as well close friends from academia—Bill Poorvu, John McMahan, and Alex Garvin. I am especially grateful to my colleague and coteacher of the field studies classes at Harvard, Bing Wang, who has pushed forward the boundaries connecting real estate and design. I am grateful to my colleagues at Harvard and USC who have helped to forge my views about urban development over the years—Alan Altshuler, Alex Krieger, Arthur Segel, Peter Gordon, Rahul Mehrotra, Jerold Kayden, Carl Steinitz, and Tony Gomez-Ibanez, as well as colleagues from other schools—Richard Arnott, Alex Anas, Jim Berry, Alastair Adair, Karl Werner-Schulte, and Glenn Mueller.
All these people deserve credit for helping make this third edition as good as possible. They are absolved of any mistakes, the full responsibility for which is our own.
Last but not least, my wife Beverly has endured the absences and preoccupation to get the book finished. I cannot thank her enough for all that she does for me. It is to my children and my students that this book is dedicated in the hope that the knowledge and practice of real estate development, in its fullest meaning, will be better tomorrow than they are today.
Richard B. Peiser