ICSC: Conversation with Glenn Rufrano
The Oak Room in the Newman building welcomed Glen Rufrano, the President & CEO of Cushman Wakefield and Erika Miller, correspondent of PBS’s “nightly Business Report” for a discussion about commercial real estate. ICSC sponsored the event.
Professor Ko Wang, Newman Chair in Real Estate Finance, welcomed everyone and introduced the program.
Ms. Miller started with the question:
Can you tell us about the expansion plans for the retail sector in the US?
Retailers are thinking about the mature markets that they are in. They are thinking about volumes. How to the expand without cannibalizing there stores? 1) If you are a brand, you have to think about the growing areas of the world — India, China and Brazil. Cushman will put on a seminar with ICSC about what the situation looks like in those markets. 2)Dense urban markets: New York, Frankfurt, Hong Kong, London. These dense markets offer an extraordinarily amount of people and a great opportunity for name-brand retailers.
Why haven’t we seen loads of vacant commercial space in this recession?
New York is a special location. There has been job growth and we didn’t suffer as much as other parts of the country. Office vacancies just didn’t go down much.
Are you seeing a shift in companies that are buying rather than leasing space?
The cost of capital was low enough that many firms (e.g. Walmart, Kroger) bought rather than leased. They could save money and importantly the firm could control the property.
Outside of dense markets, what about the rest of the country?
There are lot of companies (e.g. HH Greg) that don’t need high brand exposure. So dense markets don’t offer much for them. They focus on the suburbs and don’t need central cities. They are retailers that specialize in the small markets.
Have noticed a shift on who is investing in real estate and how they are investing?
REITs now are the finest group of investments these days. They got recapitalized quickly at the recession and still very low cost of funds. Public and private pensions funds and sovereign funds are back into real estate. There are also off-shore investors that are trying to come back. In 2012 there will be more off-shore sovereign funds investing in the US.
Are you hiring?
Yes, Cushman has been. The hiring has been across the board. We hired about 1,900 around the globe. Real-estate services firms have done a lot of hiring too.
Is there any advice you give to distinguish prospective employers?
Network. Get into a company. Get some experience. Get into a company even if it’s not exactly where you want to be. Learn the City and understand the business. Don’t be picky and study the market.
Are there wildcards that you watching?
The economy. We are still working through issues. Geopolitical events. The economy and political situation is fragile that could shut down decision making. You can’t plan for it.
The global ICSC summit is coming up in Shanghai. What do you expect to get from that event?
It happens only a few years, but it’s a great event to understand retailing in local markets. There are sessions led by people in those markets. It’s a great education event and of course to meet people you don’t ordinarily meet.
Question from the audience
Is there something that integrates the mobile shopping, internet and conventional retailing? Have seen any successful concepts?
Cushman does have QR codes with signs and listings. This type of shopping is here and something dramatic will come. The US is way behind other countries. It needs to be simple so that it’s accessible to wide swath of people. It will deeply impact retailers.