Feature Stories - Oct 15th, 2008

DEVELOPMENT ‘08

NAIOP National Convention Comes to Town

by Jennifer Rachel Baumer

NAIOP, the National Association of Industrial and Office Properties, is an international, member-driven association of developers, owners and professionals in commercial real estate. The mission statement reads that members promote responsible, sustainable development that creates jobs and that NAIOP supports diversity within the industry, provides education and advocates for legislation that benefits the communities in which members work and live.

The purpose – though probably not stated anywhere – of the NAIOP annual conference Development ‘08, to be held October 20-23 at THEHotel at Mandalay Bay, is to provide education for members, interaction with CEO’s of the leading companies in the commercial real estate market, and to host it all in one of the most fascinating and dynamic cities in the country – Las Vegas. Hopefully, what happens in Vegas – spurs national development.

Every organization has an annual conference that brings together practitioners and associate members from related fields to network and learn together. This year, the annual conference is operating in a downturn economy with as much economic uncertainty hanging over the industry as imaginable. This fact makes the conference all the more important.

“I think everybody going into the conference is going in with probably a much different perspective than they had a year or two ago,” said Par Tolles, president, DP Partners/Dermody Properties. He expects peers will be sharing how to put deals together in this economy, taking a look at values and what returns are needed on projects. “Everybody will bring very unique perspectives to the conference and I think it’s great timing to have it now. People who are really in the trenches from different parts of the country are going to go home with take-aways they didn’t come in with.”

“What’s important about the conference is that many of the leading developers from all over the country all come together at this time for this event,” said Ralph Murphy, senior vice president Western Region Development, Jackson-Shaw Co. Murphy is past-president of the Southern Nevada chapter and now serves on the national board of directors executive committee as secretary. “The core group of active developers in the country will be here in town. Obviously the attendees will include other people – NAIOP’S associate members include architects, engineers, contractors, brokers, lenders, title companies, everyone involved with commercial real estate development – but particularly in this challenging economic time when the credit market is facing uncertainty there will be some interesting opportunities to hear from experts on ‘where do we go from here?’”

The NAIOP conference alternates between the East and West coasts, with the 2007 conference in Atlanta and the 2009 conference slated for Chicago. The conference has not been in Nevada for over a dozen years.

Rod Martin, vice president, Majestic Realty, is looking forward to showing the town off to the visitors. “When I’ve traveled in past years to other locations [for the conference], I was always most interested in seeing projects they’ve done within their communities and this time around is our opportunity to show off what we’ve done and how the market opportunities are in Las Vegas. Our market is probably more unique than most, so I’m looking forward to showing that off to the development community at large.” Martin has served on the NAIOP board for 10 years and is a past-president of the local board. No longer on the national board, Martin serves on a couple of committees, including the editorial board. He also served this year on the formation committee for the national conference.

And while it’s not the biggest conference to hit town and probably will only be a small blip on Las Vegas’ economic radar, it could play a large factor in the local economies of some of the communities attending members will be heading back to.

There’s a take-home when peers from the same industry are able to get together and exchange best practices and share war stories with everyone from the CEO’s of their field to the people who just started yesterday. Being from all over the country, they’re not necessarily in competition with each other, so it is possible to trade information that could actually lead to an economic bump when members go home and institute new practices. “That’s the value of the conference, to be able to communicate with your peers in the industry and talk to people from other markets that are doing better or worse than ours and trying different things and facing different challenges: and there’s no better opportunity to communicate with people who are in the business. They might just have some new ideas of how to get through the downturn,” said Murphy.

And while the NAIOP conference may only be a blip on Las Vegas’ radar, the fact that the conference is being held in Las Vegas has an effect on conference membership – this one is expected to be more successful than most because of the venue. Conference organizers are expecting over 1,000 people at the event.

“I think that it is extremely valuable to get a cross section of what’s being done elsewhere in the country,” said Martin. “A gathering like this helps you understand what’s being done elsewhere, whether it’s case studies that have been ongoing around the rest of the country or to just meet and exchange ideas with the membership at large. I think it very much lends to a better understanding of things that may have worked in other markets and can be applied directly or indirectly to your own market. Las Vegas provides a great opportunity to a lot of the eastern-based members because Las Vegas is still a very young and dynamic city and there are probably some newer concepts that are more applicable and widespread out here that some of the traditional East coast communities haven’t seen. In that regard, it’s always good to see what some of the others are doing and particularly what may have been tried and true practice in different markets.”

“Literally these are my peers in the business, from all over the country. So we meet for a day and share stories and details about projects because we’re able to talk to someone in the business from Washington DC, for example, who will be willing to share details of his pro forma and how he did a project because I don’t compete with him. So it’s a good opportunity to dig into the details of a business and share with peers,” said Murphy.

Members are coming to network and to learn. The annual conference pulls in many of the heavy hitter CEO’s who are running the companies that are doing the work in the field. There are formal panels with moderators guiding developers and people from associated fields through prepared questions, and there are also chances to mingle and learn in less formal scenarios.

In addition to the panels, over 20 different forums will focus on specific niches within the fields of office, industrial or mixed-use development fields. Each forum is made up of roughly 20 individuals, said Murphy.

There are over 20 forums in the conference which lasts the better part of four days. In addition, there are CEO Insights offered throughout the day, a chance to sit down and listen to CEO’s and business leaders in the field. “I think there’s nine different chief executives from various development companies around the country; each will present about a 90 minute session and will talk to the audience which typically consists of 100 to 200 people for each of those sessions,” said Murphy.

“Just sharing war stories about their businesses should be interesting this year with the credit crisis. We’re going to listen to what they have to say – these are the guys who are running their companies. It’s a very unique opportunity and I’m not familiar with very many other industry conferences that offer that level of opportunity to avail yourself to the senior executives of those companies,” Murphy continued.

One of the CEO’s presenting at CEO Insights is Northern Nevada’s Michael Dermody, chairman and CEO, DP/Dermody Partners. His presentation is titled “IRR Really Stands for Integrity, Respect and Responsibility” and will focus on lessons learned in running a family business and reasons for not taking his business public.

Michael Dardick, president, Granite Properties will be presenting “Doing Well by Doing Good,” a topic he says is the soft side of the business world. “Typically that phrase might refer to ‘philanthropic’ endeavors that end up being good for your business. In that same vein we believe strongly that people, values, empowerment, motivation, communication – while largely may appear to be about the individual are actually good for business. Also, while there is a huge cost – both financial and time – we believe the benefits outweigh the cost in real business results.”

Philanthropic endeavors are part of NAIOP anyway. Speaking for the Southern Nevada chapter, Murphy, who also sits NAIOP’s local board, said there’s a very strong community services committee which contributes cash, in-kind donations and volunteer time to local charitable organizations, focusing primarily on children and seniors.

“We just started a campaign to raise funds and build a clinic at a local school,” said Murphy. “It will be a health clinic for students who don’t have insurance and can’t afford to see a doctor.” The clinic will be named for Casey Jones, a former Southern Nevada chapter president who recently passed away and who Murphy calls the godfather of community service for the Southern Nevada chapter.

Development ‘08 is more than just a three-day conference in Las Vegas. It is the pre-eminent function for an organization that works with the business community and the development community on a lot of different levels and serves its members across the board, from a government affairs perspective and community development, to mentoring new leaders. “NAIOP is the voice of many (compared to a single voice) when it comes to working cooperatively with other agencies and local government agencies to assure the process and codes and so forth are fair to the development community. It is an asset to be involved and be on the front line of the creation and formation process rather than trying to undo something. NAIOP has a track record of cooperation with utilities and agencies to create a smooth development process,” said Martin.

The organization also provides members with networking opportunities, from local to national meetings, continuing education in their own field, and also, and maybe most important, a chance to be actively involved in government affairs at federal, state or local levels. The national organization focuses on Washington DC; the regional chapters focus on Carson City.

“NAIOP in many ways upgrades the quality and cohesiveness of the development throughout the community,” said Martin, “in that there’s a lot of shared ideas as a result of NAIOP members who are very interested in building quality products and those that really do serve the needs of their community adequately and have an obligation to have a functional product out there that will best suit the needs of our respective communities.