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![Page 1: 1 Presented By: Christopher Lee, President & Chief Executive Officer CEL & ASSOCIATES, INC. (310) 571-3113 “Get Ready For The Age Of Real Estate” Portland.](https://reader035.fdocuments.in/reader035/viewer/2022062407/56649da25503460f94a8ef4e/html5/thumbnails/1.jpg)
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Presented By:Christopher Lee, President & Chief
Executive Officer CEL & ASSOCIATES, INC.
(310) 571-3113
“Get Ready For The Age Of Real Estate”Portland State University
Center For Real Estate
Portland, OregonJune 5, 2008
“Get Ready For The Age Of Real Estate”Portland State University
Center For Real Estate
Portland, OregonJune 5, 2008
CEL & Associates, Inc.
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Future Headlines Real Estate Growth Cycles – What’s Ahead Five Cornerstones Of Change & Opportunity
My Advice To You
• Demographic Shifts• Employment & Market Shifts• Sustainability Shifts• Capital Shifts• Industry Shifts & Career Opportunities
TODAY’S PRESENTATION
CEL & Associates, Inc.
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A LOOK AHEAD…HEADLINES YOU MIGHT
SEE
CEL & Associates, Inc.
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eBay Becomes The #1 Source For Selling Commercial Real Estate
Monday, February 18, 2011 Daily .25¢
Today's
Highlights
NYC Office
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Fortune 500 Firms Mandate Green Building Standard By 2015
Monday, February 18, 2012 Daily .25¢
Today's
Highlights
NYC Office
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© 2009 Dow Jones & Company, Inc. All Rights Reserved
Tuesday, September 15, 2011
What’s News
020406080
100
1stQtr
3rdQtr
East
West
North
First High-Rise Farm Announced“12 Stories Is Now Equal To 600 Acres.”
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TSA Announces Terrorist Threat Labeling Policy For Buildings
Tuesday, July 14, 2012 Daily .25¢
Today's
Highlights
NYC Office
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Facebook Creates First Virtual Office
“Y Generation Declares Office Space Obsolete.”
Thursday, June 10, 2015 Daily .25¢
Today's
Highlights
NYC Office
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REAL ESTATE CYCLES1973 – 2032
“Over the past 30+ years, there has never been a time
one could not make money in real estate!”
CEL & Associates, Inc.
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1973-1978 Growth From Pent-Up Demand Caused By Oil Embargo & Stagnation
1979-1982 Transition Period
1983-1988 Growth From The Abundance Of Capital & Financial Engineering
1989-1992 Transition Period
1993-1998 Growth From Consolidation, Securitization & The Digital Economy
1999-2002 Transition Period
2003-2008 Growth From Customer Connectivity, Talent & Capital Shifts
2009-2012 Transition Period
Historical
Forecast
CEL & Associates, Inc.
REAL ESTATE GROWTH CYCLES
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1973-1978 Growth From Pent-Up Demand Caused By Oil Embargo & Stagnation
1979-1982 Transition Period
1983-1988 Growth From The Abundance Of Capital & Financial Engineering
1989-1992 Transition Period
1993-1998 Growth From Consolidation, Securitization & The Digital Economy
1999-2002 Transition Period
2003-2008 Growth From Customer Connectivity, Talent & Capital Shifts
2009-2012 Transition Period
2013-2018 Growth From Globalization, Generational Shifts, New Urbanism & Greening
2019-2022 Transition Period
Historical
Forecast
CEL & Associates, Inc.
REAL ESTATE GROWTH CYCLES
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1973-1978 Growth From Pent-Up Demand Caused By Oil Embargo & Stagnation
1979-1982 Transition Period
1983-1988 Growth From The Abundance Of Capital & Financial Engineering
1989-1992 Transition Period
1993-1998 Growth From Consolidation, Securitization & The Digital Economy
1999-2002 Transition Period
2003-2008 Growth From Customer Connectivity, Talent & Capital Shifts
2009-2012 Transition Period
2013-2018 Growth From Globalization, Generational Shifts, New Urbanism & Greening
2019-2022 Transition Period
2023-2028 Growth From Life Sciences, Suburban Recycling & Retirees
2029-2032 Transition Period
Historical
Forecast
CEL & Associates, Inc.
REAL ESTATE GROWTH CYCLES
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THE FIVE INDICATORS WHY 2008 – 2030
WILL BE THE AGE OF REAL ESTATE
CEL & Associates, Inc.
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Get Ready For The Age Of Real Estate
1st Indicator:Emerging Demographic
Trends
CEL & Associates, Inc.
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U.S. POPULATION CONTINUES TO GROW
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 20500
50
100
150
200
250
300
350
400
Population(Millions)
Source: U.S. Census Bureau.
Nearly 100 Million New Residents!
CEL & Associates, Inc.
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THE SOUTH AND THE WEST WILL GROW DRAMATICALLY
Northeast Midwest South West0
10
20
30
40
50
4.1m6.1m
43.0m
28.9m
Millions
Source: U.S. Census Bureau, Population Division, Interim State Population Projections, 2005.Regional Population change from 2000 to 2030.
- Bureau Of Labor Statistics
“64 new jobs are created for every 100 additional
residents”
CEL & Associates, Inc.
“What matters most is not where most people live…but where the greatest
number of skilled people locate.”
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GENERATION GROUPINGS2008
Source: CEL & Associates, Inc., 2005 Projected U.S. Census data.
Silent Generation (1926 - 1945)63 - 82 years36.2 million
Boomer Generation (1946 - 1964)44 - 62 years77.2 million
X Generation (1965 - 1976)32 - 43 years49.4 million
Y Generation (1977 - 1996)12 - 31 years84.0 million
83+years
78 - 82years
73 - 77years
68 - 72years
63 - 67years
59 - 62years
54 - 58years
49 - 53years
44 - 48years
38 - 43years
32 - 37years
27 - 31years
22 - 26years
17 - 21years
12 - 16years
6 - 11years
< 6years
GI Generation (Pre-1926)> 82 years7.8 million
New Millennium Generation
(1997 - )< 12 years
48.9 million
0
5
10
15
20
25
30
Millions
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GROWING POPULATION AGE 60+
Source: U.S. Census Bureau.
1900 1910 1920 1930 1940 1950 1960 1970 6.4% 6.8% 7.5% 8.5% 10.4% 12.2% 13.2% 14.1% 1980 1990 2000 2010 2020 2030 2040 2050
15.7% 16.8% 16.3% 18.4% 22.5% 25.1% 25.5% 26.0%
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 20500
10
20
30
40
50
60
70
80
90
100
110
120Millions
52.2m New 60+ Citizens
Millions
CEL & Associates, Inc.
• Life expectancy now 78 years.• Over 75 years group will
double by 2033 and triple by 2050.
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# of Owners
Millions
Source: Ernst & Young, LLP.
GROWING TIMESHARE OWNERSHIP
CEL & Associates, Inc.
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GROWING NUMBER OF FULL-TIME STUDENTS
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 20165,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
Millions
Source: National Center For Educational Studies.
Universities currently supply only 35% of student housing needs…and endowments now total $411 billion.
CEL & Associates, Inc.
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GROWING PRIMARY RENTER GROUP
18 – 34 YEARS OF AGE
Source: U.S. Census Bureau.
1995 2000 2005 2010 2020 2030 2040 2050 65.8m 63.5m 64.6m 68.4m 72.9m 74.6m 80.5m 85.7m
1995 2000 2005 2010 2020 2030 2040 205060
65
70
75
80
85
90Millions
17.3 Million Potential Renters
• Emerging Y Generation (75+ million).
• Emerging Millennials (48+ million).
• 74% 15-24 years old rent.
• 51% 25-34 years old rent.
CEL & Associates, Inc.
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1980 1990 2000 2010 2020 2030 2040 2050 14.6m 22.4m 35.3m 47.8m 59.8m 73.1m 87.6m 102.6m
GROWING HISPANIC POPULATION
Source: U.S. Census Bureau.
1980 1990 2000 2010 2020 2030 2040 205010
20
30
40
50
60
70
80
90
100
110
• Excludes an estimated 12m illegal aliens.• $1 trillion in purchasing power by 2010.• Household size 3.5 (vs. 2.6).• Median age 25.9 years (vs. 35.3 years).• 61% population growth from 1990-2005.• 54% of Hispanics are renters. 54.8 million new
Hispanic Residents
Millions
CEL & Associates, Inc.
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2000 2010 2020 2030 2040150
160
170
180
190
200
210
220
230
240
250
CONTINUED JOB GROWTH
Source: Arthur C. Nelson, March 2006.
Sunbelt Prospers• Pacific/Mt. Region 24%• Southeast Region 35%• South Central Region 11% Percent Jobs Created 70%
47.8m Total Jobs Created
Millions
CEL & Associates, Inc.
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Household Type 1950 1960 1970 1980 1990 2000 2030
Family Households
89% 85% 80% 73% 70% 68% 65%
Non-Family Household
11% 15% 20% 27% 30% 32% 35%
Living Alone 9% 13% 18% 23% 25% 26% 29%
By 2030 the U.S. population will be nearly 400 million and 50% of those under 18 will be a minority.
SHIFTING TRADITIONAL HOUSEHOLD
Source: U.S. Census Bureau.
CEL & Associates, Inc.
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Get Ready For The Age Of Real Estate
CEL & Associates, Inc.
2nd Indicator:Shifting Employment &
Market Trends
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GROWING NUMBER OFJOBS OCCUPYING SPACE
Projected Employment (Millions)*
Area 2000 2010 2020 2030
TotalChange00 - 30
%Change00 - 30
U.S. 166.8 177.8 193.3 209.3 42.5 25.5%Northeast 31.0 31.9 33.3 34.8 3.8 12.3%East N. Central 27.0 27.6 29.5 31.4 4.4 16.3%West N. Central 12.7 13.5 14.6 15.8 3.1 24.4%South Atlantic 30.7 33.7 37.3 40.9 10.2 33.2%East So. Central 9.7 10.3 11.2 12.2 2.5 25.8%West So. Central 18.2 19.9 22.2 24.5 6.3 34.6%Mountain 11.1 12.7 14.8 16.9 5.8 52.3%Pacific 26.4 28.2 30.4 32.8 6.4 24.2%
* Numbers are rounded.Source: Arthur Nelson, FAICP.
CEL & Associates, Inc.
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GROWING TOTAL SPACE NEEDS
2000 – 2040Total Growth &Non-ResidentialSpace Needed
Region billions s.f. %Northeast (CT, MA, ME…) 11.7 10%East North Central (IL, OH, MI…) 16.2 14%West North Central (MN, NE, MO…) 7.4 7%South Atlantic (FL, GA, NC…) 27.6 25%East South Central (KY, IN, AL…) 7.0 6%West South Central (TX, OK, AR…) 17.0 15%Mountain (NV, CO, UT…) 9.2 8%Pacific (CA, OR, WA…) 16.1 14%U.S. 112.2 100%
Source: Arthur Nelson, FAICP.
In 2030, 50% of all space in America will have been built AFTER 2000 and only 25-50% will be conventional sprawl.
54% Of
Total
CEL & Associates, Inc.
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Software Development Waste Management
Healthcare Emerging Technologies
Life Sciences/Biotech Colleges/Universities
Technology Aging Population/Retirees
Government Gaming
Financial Services Science
Defense/Security Nonprofits
Communications Foreign Enterprises
Trade/Logistics Banks/Lenders
Data Centers Pharmaceutical
Leisure/Food Service F.I.R.E.
Research & Development Entertainment
Green Industries Energy
GROWING INDUSTRY SECTORS
“Regional economic growth is driven by the locational choices of creative people.” Richard Florida
CEL & Associates, Inc.
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Anything Around: Anything Involving:
Colleges/Universities Mixed-Use Projects
Transportation Hubs Close-In Recreation Destinations
Ports/Coastal Cities High Security Business Parks
Biotechnology Enterprises Affordable/Workforce Housing
Government Centers Pedestrian-Friendly Retail Centers
Lifestyle Locations Retirement
Digital/High Tech Enterprises Corporate Campuses
Medical/Healthcare Urban/Suburban Redevelopment
Large/Midsize Airports Technology
Research Centers Non-Commodity Based Industries
CAN’T MISS GROWTH AREAS
CEL & Associates, Inc.
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Centers of Knowledge (San Francisco Bay Area, Boston, New York City, Austin, Seattle)
Ports (Long Beach, New York, Seattle, Oakland, Charleston, Norfolk, Savannah, Miami and Houston)
Lifestyle Cities (Phoenix, Tampa, South Florida, Portland, San Diego, Minneapolis)
Gateway and Hub Cities (Dallas/Ft. Worth, Atlanta, Miami, Los Angeles/Orange Counties, Charlotte, Chicago)
Capital Cities (Nashville, Austin, Washington, D.C./Northern Virginia) Energy States (Texas, Colorado, Central Plains States) Coastal Cities (52% Of U.S. Population) Theme Cities (Las Vegas, Orlando, Nashville) Corridors (Atlanta to Raleigh, Kansas City to Dallas to San Antonio,
Boston to No. Virginia, Sacramento to San Jose, Los Angeles to Riverside/San Bernardino to Las Vegas, Portland to Seattle)
GROWTH MARKETS – U.S.
CEL & Associates, Inc.
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Among the Top 10 Places To Live.
Acknowledged “lifestyle” city.
Diverse population of nearly 2 million.
Strong job growth.
“Biking-friendly” environment.
Ten colleges and universities.
One of America’s Top 50 “Green” cities.
Ranked by AARP as one of Top 5 cities in which to live.
Home to major employers.
PORTLAND HAS IT ALL…
CEL & Associates, Inc.
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Get Ready For The Age Of Real Estate
CEL & Associates, Inc.
3rd Indicator:Shift To Sustainability
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U.S. buildings consume 39% of U.S. energy.
U.S. buildings account for 70% of U.S. electricity consumption.
Less than 1% of all commercial buildings are LEED certified.
More than 50% of corporate CEOs rated energy efficiency as a corporate priority.
Green buildings can generate a 12%-15% return on cost, and achieve a 90% tenant retention rate.
CEL & Associates, Inc.
SHIFT TO SUSTAINABLE ASSETS
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The Energy Independence and Security Act of 2007 allocates more than $1.0 billion to improve energy efficiency in buildings.
The Zero Net Energy Commercial Buildings Initiative sets a carbon neutrality in all commercial buildings by 2050.
All existing GSA leases beginning in 2010 must be in an Energy Star-designated building (impacting 100 million square feet of privately-owned buildings).
All new GSA leases after 2011 must be in a LEED certified building.
CEL & Associates, Inc.
INCREASING GOVERNMENT FOCUS
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Difference Over Non-Sustainable Buildings Category Energy Star Buildings LEED Buildings
Occupancy 3.6% 4.1%
Energy Usage 40%
Carbon Emissions 35%
GREEN BUILDINGS WORK!
Source: 1,300 LEED And Energy Star Buildings. Co-Star.
CEL & Associates, Inc.
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Get Ready For The Age Of Real Estate
CEL & Associates, Inc.
4th Indicator:An Abundance Of
Capital
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There are over $15 trillion of global commercial real estate properties…35% of which are in the U.S.
50% of all global direct real estate investments occurs in North America.
There is estimated to be $1.5 trillion in global capital seeking real estate opportunities.
$1.5 trillion (or over 32,000 properties) in total transactions in 2007…a trend likely to continue.
Dramatic increase in fund buyers.
CEL & Associates, Inc.
THE OPPORTUNITY
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TYPE OF BUYER2001 - 2008
(Billions of Dollars)1 Buyer Composition 2001 2002 2003 2004 2005 2006 2007 20082
2001 % Tot.
2007 % Tot.
2008 % Tot.2
Condo Converter $0.7 $1.0 $2.9 $12.5 $31.1 $10.0 $2.5 $0.2 0.9% 0.6% 0.4% Cross-Border $3.0 $7.6 $9.0 $14.0 $19.9 $16.3 $34.6 $2.3 3.9% 8.1% 5.8% Fund $6.7 $8.4 $8.5 $13.1 $23.0 $47.6 $100.6 $4.2 8.7% 23.5% 10.4% Inst'l $17.4 $17.5 $16.3 $31.6 $50.9 $61.6 $97.3 $8.3 22.5% 22.8% 20.7% Private - Local $15.0 $18.3 $24.8 $35.3 $47.8 $58.2 $60.6 $9.7 19.4% 14.2% 24.0% Private - Nat'l $12.3 $14.0 $17.1 $24.6 $33.9 $53.6 $52.9 $5.8 15.9% 12.4% 14.3% Reit/Public $8.6 $22.2 $21.4 $27.1 $34.8 $26.6 $42.3 $3.7 11.1% 9.9% 9.2% Syndicator $1.3 $3.4 $7.8 $11.1 $14.0 $9.9 $15.5 $1.5 1.7% 3.6% 3.7% User/Other $7.5 $5.5 $6.6 $7.7 $9.2 $10.1 $11.0 $2.0 9.7% 2.6% 4.9% (N/A) $4.9 $4.0 $6.0 $10.4 $11.2 $13.4 $10.3 $2.7 6.3% 2.4% 6.7% Grand Total $77.4 $101.9 $120.4 $187.3 $275.8 $307.4 $427.6 $40.2 100.0% 100.0% 100.0%
1 Rounded. 2 First Quarter 2008 data.
Source: ©2007 Real Capital Analytics, Inc. All rights reserved.
CEL & Associates, Inc.
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There are over $15 trillion of global commercial real estate properties…35% of which are in the U.S.
The 20 largest economies in the world produce 65% of the world’s GDP and 90% of its investable real estate.
50% of all global direct real estate investments occurs in North America.
There is estimated to be $1.5 trillion in global capital seeking real estate opportunities.
$1.5 trillion (or over 32,000 properties) in total transactions in 2007…a trend likely to continue.
Dramatic increase in fund buyers. Real estate has become a preferred asset class.
CEL & Associates, Inc.
THE OPPORTUNITY
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REAL ESTATE OUTPERFORMS
THE STOCK MARKET
CEL & Associates, Inc.
Total Return: A stock's dividend income plus capital appreciation, before taxes and commissions. * June 2, 2008.
Source: NAREIT and CEL & Associates, Inc.
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* Projected.Source: AMG Data, BB&T Capital Markets and CEL & Associates, Inc.
1992 1998 2001 2003 2005 2010 2030$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
Billions
$90 billion
* *
GROWING VALUE OF REAL ESTATE ASSETS HELD IN EQUITY MUTUAL FUNDS
CEL & Associates, Inc.
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GROWTH IN SYNDICATOR BUYERS
OVERALL 2001 - 2008
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4$0
$1
$2
$3
$4
$5
$6
0.1 0.2 0.20.3 0.3
0.5
0.7
1.2
0.7
1.4
0.8
2.5
1.3
2.42.3
2.7
2.0
3.1
4.4
3.7
2.9
3.8
2.5
4.0
2.7
3.4
5.0
5.7
1.5
Sales (in billions)
20062002 2003 2004 20052001 2007 2008
Source: ©2008 Real Capital Analytics, Inc. All rights reserved.
CEL & Associates, Inc.
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GROWTH IN CROSS-BORDER BUYERS OVERALL 2001 -
2008
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4$0
$2
$4
$6
$8
$10
$12
$14
$16
0.7
1.4
0.60.9 0.9
2.42.2
2.8
2.01.4
3.2 3.12.6
3.8 4.0
4.8
3.6
7.7
5.15.5
5.95.5
6.8
4.7 4.9
14.5
11.0
6.5
2.3
Sales (in billions)
20062002 2003 2004 20052001 2007 2008
Source: ©2008 Real Capital Analytics, Inc. All rights reserved.
• Foreign investors own $230 billion in U.S. real estate assets.
CEL & Associates, Inc.
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SALES VOLUME – OFFICE2001 - 2008
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
7.6 8.96.4
9.26.5
9.511.8
13.6
9.2 8.3
14.0 15.312.2
16.4
22.5 23.4
18.7
27.6 27.830.6
23.5
34.3 34.2
46.4
79.4
60.5
47.2
28.8
14.4
Office - CBD Office - Sub
20062002 2003 2004 20052001
Sales (in billions)
2007 2008
Source: ©2008 Real Capital Analytics, Inc. All rights reserved.
Portland (Past 12 Months)
• $1.2 billion sold• 6.8% average cap rate• 93% of asking price
CEL & Associates, Inc.
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OFFICE FLIGHT TO QUALITY
Source: Bank of America, Real Capital Analytics, SNL Financial and CEL & Associates, Inc.
CEL & Associates, Inc.
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SALES VOLUME – RETAIL2001 - 2008
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4$0
$5
$10
$15
$20
$25
$30
3.8
1.92.6
3.43.9
9.5
5.8
7.6
6.1 6.3 6.3
11.4
9.2 9.6
12.5
27.2
9.2
16.5
11.2
14.1
9.1
12.6
14.8
17.4
26.5
20.0
17.5
11.0
6.5
Mall & Other Strip
Sales (in billions)
20072002 2003 2004 20052001 2006 2008
Source: ©2008 Real Capital Analytics, Inc. All rights reserved.
Portland (Past 12 Months)
• $280 million sold• 6.6% average cap rate• 93% of asking price
CEL & Associates, Inc.
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RETAIL LIKELY TO SLOW
Source: Bank of America, Real Capital Analytics, SNL Financial and CEL & Associates, Inc.
CEL & Associates, Inc.
There could be as many as 5,800 store closings in 2008.
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SALES VOLUME – APARTMENTS2001 - 2008
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4$0
$5
$10
$15
$20
$25
$30
$35
$40
4.35.2 5.6 5.5 4.9
5.8 5.76.7
5.3
8.17.2
9.89.1
11.3
13.3
17.418.3 17.7
28.2
24.826.1
18.2
20.3
27.2
20.4 19.8
23.2
36.9
12.0
Garden Mid/Highrise
Sales (in billions)
20072002 2003 2004 20052001 2006 2008
Source: ©2008 Real Capital Analytics, Inc. All rights reserved.
Portland (Past 12 Months)
• $1.1 billion sold• 5.2% average cap rate• 95% of asking price
CEL & Associates, Inc.
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MULTIFAMILY WILL BENEFIT FROM SUBPRIME MALAISE
CEL & Associates, Inc.
Home prices will decline 8%-12% nationwide in 08 after a 12% decline in 07…which means 15 million mortgages (30% of total or
$3 trillion) will be worth more than the homes they financed.
Source: Bank of America, Real Capital Analytics, SNL Financial, CEL & Associates, Inc., Wall St. Journal.
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DEMISE OF CONDO CONVERTER BUYERS – OVERALL 2001 - 2008
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
0.2 0.2 0.2 0.1 0.10.3 0.3 0.3
0.50.7 0.8 0.9
1.5
2.0
3.9
4.95.2
6.7
9.18.7
5.7
2.1
1.4
0.7 0.7
0.3 0.3 0.30.2
Sales (in billions)
20072002 2003 2004 20052001 2006 2008
Source: ©2008 Real Capital Analytics, Inc. All rights reserved.
CEL & Associates, Inc.
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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4$0
$2
$4
$6
$8
$10
$12
$14
$16
3.1 3.22.4
4.9
2.02.4 2.6
4.5
3.0 3.22.7
5.4
3.53.8
6.1
7.5
6.7
9.59.9
10.5
11.7
10.8
9.0
11.911.2
13.413.9
9.8
7.1
Flex Warehouse
SALES VOLUME – INDUSTRIAL2001 - 2008
Sales (in billions)
20072002 2003 2004 20052001 2006 2008
Source: ©2008 Real Capital Analytics, Inc. All rights reserved.
Portland (Past 12 Months)
• $486 million sold• 6.6% average cap rate• 93% of asking price
CEL & Associates, Inc.
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INDUSTRIAL REMAINS HEALTHY
Source: Bank of America, Real Capital Analytics, SNL Financial and CEL & Associates, Inc.
CEL & Associates, Inc.
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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
$1.4
$1.6
$1.8
0.1 0.1
0.2 0.2
0.1 0.1
0.30.4
0.1
0.30.2
0.9
0.4
0.80.9
0.7
0.50.6
0.8
1.4
1.11.0
0.9
1.4
1.1
1.6
1.3
1.0
0.9
Medical Office
Sales (in billions)
SALES VOLUME – MEDICAL OFFICE
2001 - 2008
20072002 2003 2004 20052001 2006 2008
Source: ©2008 Real Capital Analytics, Inc. All rights reserved.
• 3 out of 10 jobs created between 2007-2015 will be in healthcare.
• Healthcare to be 20% of GDP by 2015.
CEL & Associates, Inc.
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TOTAL SALES VOLUME – COMBINED2001 - 2008
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4$0
$20
$40
$60
$80
$100
$120
$140
$160
19 19 1723
17
27 26
33
24 2630
43
34
42
55
76
53
7278
81
7177 79
104
139
115
103
87
41
Sales (in billions)
20072002 2003 2004 20052001 2006 2008
Source: ©2008 Real Capital Analytics, Inc. All rights reserved.
CEL & Associates, Inc.
During the past 12 months, Portland had over $3.4 billion in asset sales.
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CAP RATES – U.S. OVERVIEW2001 - 2008
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q15.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
9.0%
9.5%
10.0%
10.5%
11.0%
Apartment Industrial Office Retail Medical Combined
Cap Rate
7.0%6.9%6.8%6.7%
6.2%
20072002 2003 2004 20052001 2006 2008
Source: ©2008 Real Capital Analytics, Inc. All rights reserved.
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Continued increase in public-private partnerships.
Continued investments in real estate resulting from a $45 trillion wealth transfer (1997 – 2052).
Continued increase in the number of “green building conversions.”
Continued scarcity of developable land within “reasonable” commuting distances of the CBD.
Continued increase in pension fund target allocations into real estate (up 100bsp – 250bsp).
PLUS…
CEL & Associates, Inc.
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Cap rates will remain low by historical standards.
New valuation methodologies will likely sustain an active acquisition environment.
“Fringe-based” opportunistic investors will be “flushed-out” during this downturn leaving a more structured and organized investment environment.
Continued growth in new urbanism and use of real estate assets to revitalize cities and communities.
Credit crisis will be cured within 24 – 36 months.
PLUS…
CEL & Associates, Inc.
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Get Ready For The Age Of Real Estate
CEL & Associates, Inc.
5th Indicator:Real Estate Industry Shifts
& Career Opportunities
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2008 – CEO PRIORITIES
Top CEO Priorities Rank
Retention Of Talent 1 Recruitment Of Talent 2 Business Development 3 Managing Client Relationships 4 Creating A Differentiating Story 5 Increasing Broker Production 6 Improving Leadership/Communications 7 Getting Brokers To Collaborate 8 Controlling Operating Costs 9 Getting Brokers To Share Information 10 Integrating Technology 11 Working Within Corporate Structure 12 Managing Prima Donnas 13
Source: CEL & Associates, Inc. and Participating Firms.
CEL & Associates, Inc.
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UNEMPLOYMENT RATECOLLEGE GRADUATES
1996 1997 1998 1999 2000 20012001 2002 2003 2004 2005 20062006 2007 20080.00%
0.25%
0.50%
0.75%
1.00%
1.25%
1.50%
1.75%
2.00%
2.25%
2.50%
2.75%
3.00%
3.25%
3.50%
Source: Bureau of Labor Statistics.
Percent
2.1% (04/08)
CEL & Associates, Inc.
Females now comprise 57% of college enrollment.
![Page 61: 1 Presented By: Christopher Lee, President & Chief Executive Officer CEL & ASSOCIATES, INC. (310) 571-3113 “Get Ready For The Age Of Real Estate” Portland.](https://reader035.fdocuments.in/reader035/viewer/2022062407/56649da25503460f94a8ef4e/html5/thumbnails/61.jpg)
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30% - 40% of real estate service companies that exist today will be gone by 2017.
The emergence of the Big 3 or Big 4 will create 3 - 4 niche opportunities for everyone else.
By 2017, 50% of today’s Brokers will be replaced by collaborative teams of professionals and Advisors. A new Brokerage Model will emerge.
The shift to a knowledge-based, client-centric and talent-focused business model will be fairly commonplace.
CEL & Associates, Inc.
EMERGING REAL ESTATE SERVICE COMPANY TRENDS
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Current Model Future Model Dominated By Personalities Dominated By Knowledge
Staffed By Employees Comprised Of Free Agents
Hierarchical Structure/Silos Virtual Integration & Teams
Geo-Centric Knowledge-Centric
Driven By Process Driven By Creators Of Value
Governed By Organizational Charts Consisting Of Networks & Alliances
Controlling Power Shared Power
Based On Contracts Based On Relationships & Connectivity
On-Time Fulfillment Real-Time Fulfillment
Commodity-Driven Experience-Driven
Explaining Competitor Differences Creating A Differentiating Story
Focus On Service Focus On Solutions
THE NEW BUSINESS MODEL
CEL & Associates, Inc.
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REAL ESTATESERVICE COMPANY
PERFORMANCE
Percent Change Over Prior Year
Category 2008 2009 2010
Leasing -9.0% to -17.0% -7.0% to -11.0% +6.0% to +9.0%
Investment Sales -17.0% to -25.0% -6.0% to -12.0% +5.0% to +8.0%
Property Management +7.0% to +10.0% +9.0% to +12.0% +6.0% to +9.0%
NOIs -10.0% to -14.0% -8.0% to -11.0% +7.0% to +10.0% Source: CEL & Associates, Inc.
CEL & Associates, Inc.
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Employee Turnover Rate
Overall Rate
Senior Executive
Regional Executive
On-Site Manager
On-Site Leasing
On-Site Maintenance
1998 Average 35.6% 6.8% 10.5% 19.7% 32.4% 42.7% 1999 Average 36.3% 6.4% 9.9% 20.5% 33.7% 41.8% 2000 Average 34.5% 5.8% 9.2% 18.3% 31.3% 39.3% 2001 Average 32.5% 5.2% 8.4% 17.2% 30.8% 37.9% 2002 Average 34.3% 5.4% 7.6% 16.1% 29.1% 36.7% 2003 Average 29.1% 4.9% 7.3% 17.4% 26.7% 35.2% 2004 Average 28.4% 4.2% 6.9% 16.6% 25.5% 34.4% 2005 Average 29.2% 4.1% 7.1% 17.1% 26.3% 33.7% 2006 Average 27.9% 3.8% 6.8% 16.8% 25.1% 31.9% 2007 Average 28.5% 3.9% 7.0% 17.9% 24.8% 32.5%
Average Employee Tenure: 3.5 Years. Average Age of a Construction Executive: 51.4 years. Average Age of a Construction Superintendent: 48.6 years. Average Age of a Property Manager: now 43.5 years. Average Age of a Broker: now 46.2 years.
EMPLOYEE TURNOVER TRENDS
COMMERCIAL
CEL & Associates, Inc.
Source: CEL & Associates, Inc.
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EMERGING TRENDSBASE SALARIES*
CEL & Associates, Inc.
Line Position 2004 2005 2006 2007 2008
%Change04–08
1 Chief Executive Officer/CEO $390,100 $414,500 $520,800 $550,400 $636,300 41.1%
2 Chief Operating Officer/COO $348,100 $363,300 $376,800 $427,800 $491,500 22.9%
3 Chief Investment Officer $309,600 $325,500 $394,000 $435,600 $494,000 40.7%
4 CFO/Top Financial Executive $242,600 $251,900 $266,100 $290,200 $368,400 19.6%
5 Top Business Development Exec. $230,000 $246,400 $254,500 $263,100 $292,400 14.4%
6 Top Human Resources Executive $118,600 $122,800 $126,600 $135,600 $174,200 14.3%
7 Payroll Manager/Specialist $62,900 $64,300 $66,200 $68,800 $77,700 9.4%
8 Benefits Manager/Specialist $70,500 $73,000 $75,000 $75,800 $78,000 7.5%
9 General Counsel $247,100 $256,900 $278,800 $303,700 $338,700 22.9%
10 Top MIS Executive/IT Director $131,100 $134,300 $138,400 $147,400 $184,900 12.4%
11 Network Administrator $77,000 $79,000 $81,400 $82,600 $92,700 7.3%
12 Corp. Comm./Investor Relations $161,000 $168,800 $175,200 $178,700 $190,300 11.0%
* 75th Percentile.
Source: CEL & Associates, Inc. 2007 National Real Estate Compensation Survey (Office/Industrial).
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EMERGING TRENDSBASE SALARIES*
CEL & Associates, Inc.
Line Position 2004 2005 2006 2007 2008
%Change04–08
13 Research Director $143,200 $147,100 $151,900 $156,400 $158,900 9.20%
14 Training Director/Manager $92,800 $105,300 $114,100 $116,800 $120,000 25.9%
15 Finance Director $176,400 $183,800 $194,000 $199,800 $213,400 13.3%
16 Controller $118,500 $121,400 $125,300 $143,000 $163,700 20.7%
17 Accounting Supervisor $73,800 $76,600 $79,900 $82,100 $90,700 11.2%
18 Property Accountant - Senior $59,900 $62,200 $63,900 $65,500 $72,600 9.3%
19 Property Accountant $47,400 $48,900 $51,300 $52,600 $61,200 11.0%
20 Financial Analyst $75,000 $77,100 $79,400 $82,200 $91,500 9.6%
21 Tax Manager $97,800 $104,100 $111,000 $114,400 $145,200 17.0%
* 75th Percentile.
Source: CEL & Associates, Inc. 2007 National Real Estate Compensation Survey (Office/Industrial).
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EMERGING TRENDSBASE SALARIES*
CEL & Associates, Inc.
Line Position 2004 2005 2006 2007 2008
%Change04–08
22 Top Division Executive $217,400 $227,500 $241,200 $261,800 $282,100 20.4%
23 Top Regional Executive $223,900 $231,500 $244,500 $252,600 $272,200 12.8%
24 Top Acquisitions Executive $185,600 $193,700 $206,100 $219,800 $230,500 18.4%
25 Acquisitions Associate $95,200 $98,600 $103,000 $111,100 $116,400 16.7%
26 Top Asset Mgmt. Executive $191,300 $197,700 $208,500 $221,700 $235,200 15.9%
27 Portfolio Manager $105,400 $110,600 $114,700 $121,000 $134,000 14.8%
28 Top Property Mgmt. Exec. $175,200 $182,100 $190,700 $201,600 $209,700 15.1%
29 Off/Ind Prop. Mgr. (< 500k sf) $72,300 $74,600 $76,900 $79,600 $83,400 10.1%
30 Off/Ind Prop. Mgr. ( 500k-1m sf) $88,600 $91,500 $94,400 $98,400 $102,300 11.1%
31 Off/Ind Prop. Mgr. (>1m sf) $119,800 $123,900 $128,600 $135,200 $139,800 12.9%
* 75th Percentile.
Source: CEL & Associates, Inc. 2007 National Real Estate Compensation Survey (Office/Industrial).
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UNLIMITEDCAREER
OPPORTUNITIES!
CEL & Associates, Inc.
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Profession always in demand. Highly Rewarding. Opportunity to shape live, work, play shop
environments. Opportunity to create communities. Shortage of talent. Growing opportunities. Opportunity to start your own business. Independence. Not a desk job. Work with others who share the same passion.
WHY A CAREER IN THE REAL ESTATE INDUSTRY
CEL & Associates, Inc.
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Advisors Mutual Funds
Appraisal Firms Non-Profits
Commercial Banks Partnerships
Construction Firms Pension Funds
Consultants Private Investors
Corporate Public Sector
Foreign Investors REITs
Fund Sponsors REOCs
Insurance Companies Service Companies
Investment Banks Syndicators Source: CEL & Associates, Inc.
EMPLOYERS
CEL & Associates, Inc.
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Academic Training Global Perspective
Analytical Skills Integrity
Business Acumen Interpersonal Skills
Collaboration Skills Leadership Skills
Communication Skills Relationship Builders
Creativity Self-Motivators
Entrepreneurial Attitude Value Creators
Flexibility Writing Skills
Source: CEL & Associates, Inc
EMPLOYERS ARE SEEKING
CEL & Associates, Inc.
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www.realestatejobs.com
www.retsusa.com
www.californiarecruiter.com
www.specon.com
www.christophergroup.net
www.jcrexecutivesearch.com
www.heidrick.com
www.crownsearch.com
POPULAR JOB SEARCH WEBSITES
CEL & Associates, Inc.
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American Hotel & Lodging Association (AH & LA). . . . . . . . . . . . . . . . . www.ahla.com
American Planning Association (APA). . . . . . . . . . . . . . . . . . . . . . . . . . www.planning.org
American Real Estate Society (ARES) . . . . . . . . . . . . . . . . . . . . . . . . . www.aresnet.org
American Society Of Appraisers (ASA). . . . . . . . . . . . . . . . . . . . . . . . . www.appraisers.org
Building Owners Managers Association (BOMA). . . . . . . . . . . . . . . . . www.boma.org
Commercial Real Estate Women (CREW). . . . . . . . . . . . . . . . . . . . . . www.crewnetwork.org
Counselors Of Real Estate (CRE). . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.cre.org
Institute Of Real Estate Management (IREM). . . . . .. . . . . . . . . . . . . . . www.irem.org
International Council Of Shopping Centers (ICSC). . . . . . . . . . . . . . . . www.icsc.org
International Facility Management Association (IFMA). . . . . . . . . . . . . www.ifma.org
National Apartment Association (NAA). . . . . . . . . . . . . . . . . . . . . . . . . www.naahq.org
National Association Of Home Builders (NAHB). . . . . . . . . . . . . . . . . . www.nahb.com
National Association Of Industrial And Office Properties (NAIOP). . . . www.naiop.org
National Association Of Real Estate Investment Managers (NAREIM) www.nareim.org
National Association Of Real Estate Investment Trusts (NAREIT). . . . www.nareit.com
National Association Of Realtors (NAR). . . . . . . . . . . . . . . . . . . . . . . . www.realtor.org
National Multi Housing Council (NMHC). . . . . . . . . . . . . . . . . . . . . . . . www.nmhc.org
Real Estate Research Institute (RERI). . . . . . . . . . . . . . . . . . . . . . . . . www.reri.org
Urban Land Institute (ULI). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.uli.org
Source: CEL & Associates, Inc.
REAL ESTATE ORGANIZATIONS
CEL & Associates, Inc.
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TAKE A GUESS…
How ManyWebsite Hits Under“Real Estate Jobs” ?
CEL & Associates, Inc.
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TAKE A GUESS…
1,060,000,000!!
CEL & Associates, Inc.
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MY ADVICE TO YOU…
CEL & Associates, Inc.
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For Lenders…2010 will be your transformative year.
MY ADVICE TO YOU…
CEL & Associates, Inc.
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For Lenders…2010 will be your transformative year.
For Developers…Focus on building valued Tenant relationships.
MY ADVICE TO YOU…
CEL & Associates, Inc.
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For Lenders…2010 will be your transformative year.
For Developers…Focus on building valued Tenant relationships.
For Brokers…Find your niche and be the best at it!
MY ADVICE TO YOU…
CEL & Associates, Inc.
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For Lenders…2010 will be your transformative year.
For Developers…Focus on building valued Tenant relationships.
For Brokers…Find your niche and be the best at it!
For Investors…Capitalize on a market in transition.
MY ADVICE TO YOU…
CEL & Associates, Inc.
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For Lenders…2010 will be your transformative year.
For Developers…Focus on building valued Tenant relationships.
For Brokers…Find your niche and be the best at it!
For Investors…Capitalize on a market in transition.
For Real Estate CEOs…Surround yourself with the best talent.
MY ADVICE TO YOU…
CEL & Associates, Inc.
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For Lenders…2010 will be your transformative year.
For Developers…Focus on building valued Tenant relationships.
For Brokers…Find your niche and be the best at it!
For Investors…Capitalize on a market in transition.
For Real Estate CEOs…Surround yourself with the best talent.
For Students & Recent Grads…Pursue your dreams in an industry poised for incredible opportunities for decades to come.
MY ADVICE TO YOU…
CEL & Associates, Inc.
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For Lenders…2010 will be your transformative year.
For Developers…Focus on building valued Tenant relationships.
For Brokers…Find your niche and be the best at it!
For Investors…Capitalize on a market in transition.
For Real Estate CEOs…Surround yourself with the best talent.
For Students & Recent Grads…Pursue your dreams in an industry poised for incredible opportunities for decades to come.
For Everyone…Have fun…the next 20 years will be the best time of your life!
MY ADVICE TO YOU…
CEL & Associates, Inc.
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Presented By:Christopher Lee, President & Chief
Executive Officer CEL & ASSOCIATES, INC.
(310) 571-3113
“Get Ready For The Age Of Real Estate”Portland State University
Center For Real Estate
Portland, OregonJune 5, 2008
“Get Ready For The Age Of Real Estate”Portland State University
Center For Real Estate
Portland, OregonJune 5, 2008
CEL & Associates, Inc.