Asset Services Insights - Fall 2016

Q Is there a typical approach you take when helping our clients understand the risks they are taking? I listen. I don’t go in and try to convince a prospect or a client that they need a particular solution. I listen as they explain their problem or concern. I try to develop a complete understanding of their business model during the initial meeting and then I leave and contemplate. I may ask for additional information or I may begin to lay out possible solutions. Once I’ve evaluated the relative merits of each, I return to the client, lay out the options, and recommend the one I feel makes the most sense and why. Q As our world continues to evolve and become increasingly unpredictable, what is your advice to investors of real estate and property management professionals? Successful investing is all about risk management and maximizing ROI. Real estate investors are typically very good at assessing financial risk but, in my experience, very few take into consideration location-specific physical risks prior to purchasing an asset. For example, if a property is vulnerable to coastal storm surge flooding, as was the case with about a dozen Class-A office buildings in Downtown Manhattan during Hurricane Sandy, the cost to the owner in lost rents, payment of insurance

Q Name your favorite place in the world, where you have either traveled or lived, and the reason(s) why it’s your favorite. The middle of the ocean. It doesn’t matter which ocean, except probably the Arctic. I have been an offshore sailor for most of my adult life. Some of the most beautiful things I’ve seen have been far from the sight of land. Aside from that, I always feel at home when I arrive in Paris—although I’ve never lived there. But, there are so many beautiful and interesting places—Machu Pichu in Peru, Ilha Grande off the east coast of Brasil, the Turquoise Coast of Turkey, Sicily. I could go on and on. Q You’ve traveled the world, but is there anywhere you haven’t been that you’d still like to visit? Yes. I have always wanted to sail around the world. I still hope to do that but the one part of the world that I have never seen is the tropical Pacific—Micronesia, Australia, and New Zealand. Of course, sailing there would be the best— probably the only—way to do it. Q And, if you had one day where you could be completely disconnected from work and the potential threats of the world, how would you spend that day?

deductibles, and marketing costs to re- rent the building can have an enormous impact on ROI. My advice to investors is to spend the relatively small cost of having an all-hazard risk assessment done before purchasing any new asset. As for property managers, the terrorism threat has changed fundamentally. Whereas the concern previously had been that organized groups like al Qa’ida would mount a planned, coordinated attack against a property, the threat now is that any individual can read instructions online on how make explosives, build an Improvised Explosive Device, and carry out an attack at what is now referred to as “lifestyle” targets— places where large numbers of people gather. It is critical property management staff are trained to be alert for potential threats and know how to effectively respond. A robust emergency response program must be laid out with specific responsibilities for all property personnel for all possible emergency scenarios. Active engagement with local law enforcement and neighboring property managers is important to build trusted relationships so information about potential threats can be shared immediately, and to enable law enforcement to verify whether a threat exists and to neutralize it if it does.

“Sailing on my sailboat

Albamar . It doesn’t matter where but hopefully at sea, far from land.”

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