How Tishman Speyer benefits from being a global real estate firm

Transcript

Hi, I'm Rob Speyer. I'm CEO of Tishman Speyer. We're a global real estate company headquartered here in New York City at Rockefeller Center, but with global operations across Asia, Europe, Latin America, and the United States. We invest in real estate ranging from office buildings to labs to residential to proptech to industrial buildings. So we are a fully diversified real estate company. We do value add and opportunistic. We also do core investing in income-producing properties. And then finally, sometimes we will develop the core, meaning we will do ground-up development of a building, and then we will hold it long term for the income profile. We have a vertically integrated model, everything that adds value to real estate we do in-house. So we're not just capital allocators, we're doing the investing, but we're also doing the developing, the operating, the finance, the leasing, the management, all of that we have in-house. Our biggest edge is our people. We tend to have people that we train coming right out of school. So we acculturate them, and we give them all the real estate skills. And my job is basically to empower them, define real estate, where we can differentiate it, where we can create something that doesn't exist, where we can buy a building and reinvent it, where we can buy a piece of land and create a neighborhood. So it's kind of seeing things that don't exist yet and then bringing them into existence. Twenty years ago, an entrepreneur named Bill Model, who is famous for creating the model sporting goods empire, he bought up a whole swath of Long Island City, which is a neighborhood in Queens. And at the time, the area that he bought was completely desolate. In fact, it only had one purpose. It was where the Rikers Island jail let out the inmates every week. So this was not an obvious place to do real estate development. But Bill took me on a walk, and suddenly we were in a pretty nice neighborhood with single-family homes, with an office building that was occupied by Citigroup. And I thought to myself, wait a second, we could carry this over to Bill's land, and we could create something special. And now, 20 years later, it's got two-thousand apartments that we've developed. It's got four and a half million feet of commercial space. It's got three acres of parks, and it's a neighborhood, and it's a place that people choose to live and choose to eat and choose to work. And we created it literally out of nothing. Until about ten years ago, we were best known for investing in and developing office buildings, and then we started towards a big diversification push, and we moved into residential, into a big way and then into life sciences and then into venture investing, into proptech and now into industrial. And we've always been quite geographically diverse. So we were the first US developer to go to Europe and then to Latin America, and more recently, to Asia.

So as an example, in Europe, 25 years ago, we started learning about sustainability and the importance of climate change and the role that real estate had, both in carbon emissions, but also in terms of being part of the solution, and we brought that practice to the US, to Latin America, and to Asia. Another example it was in Asia, that we learned about mixed-use development, about combining offices apartments, hotels, retail, all in one building or in one district of buildings. And so now I look at some of the exciting projects we're doing here in the US are joint ventures with Harvard, with the San Francisco Giants, with the San Diego Padres, with Carnegie Mellon University. And we're taking all the mixed-use practices that we learned in Asia, and we're bringing them here to innovate in the United States. And that's one of the great benefits of being global. I think of diversification in two ways. One is geographic, and the other is asset class. And I don't think you can achieve true diversification without both. So if you're in the United States, you want to get a piece of real estate in Europe, in Asia, and you want to also make sure you're not overly leveraged to one asset class. And again, real estate is such a large asset class that there are plenty of investable opportunities. You just have to find the right managers, people that you trust, and people that have good performance over a long period of time.