Industry Father Imparts a Lifetime's Wisdom
September 29,2007
Known as the father of the real estate investment industry, Blake Eagle — like any devoted father — is happy to share with younger generations the lessons from a life of experience. On September 29th, 2007, in a rousing commencement address, Eagle did just that for graduates of the MIT Center for Real Estate (MIT/CRE), distilling wisdom from four decades of real estate practice into a half hour of reflection, encouragement, and advice.
"Industry Rock Star"
Eagle was introduced to the audience of 150 by MIT/CRE Professor David Geltner, who offered an outline of Eagle's professional career for those unfamiliar with him as the "industry rock star" he has become.
Blake Eagle spearheaded the formation of the National Council of Real Estate Investment Fiduciaries (NCREIF) in 1982, a ground-breaking industry association that collects, validates, and publishes real estate performance data; he was also central to the development of the flagship NCREIF Property Index, the first large-scale industry benchmark of its kind.
Geltner emphasized also that Eagle was Chairman of MIT/CRE for seven years, coming to the Center in the mid-1990s "during one of real estate's darkest hours, when both the Center and the industry were in crisis" after the worst crash since Great Depression. "He infused people with optimism, vision, and a sense of great opportunity," Geltner said.
MIT/CRE Mission Is Its Graduates
Eagle himself took the podium by focusing on the importance of the industry that the graduates were about to enter. "A third of the world's wealth is in the built environment," Eagle said. "More capital is invested in real estate worldwide than in any other major economic sector."
He underlined the Center's place in the industry, as defined by its mission of almost 25 years — to improve the built environment and promote more informed professional practice through its one-year Masters Program, its industry-level professional development courses, and its independent research program.
"Real estate is such a critically important sector of the global economy that it must be addressed at the academic level," Eagle said. "For too long, real estate has been the most under-researched of sectors. MIT/CRE is helping to bring the industry up to the standards of other major economic sectors," he said, "and it's all happening right here at MIT."
"Fulfilling the Center's mission improves the efficiency of real estate markets and frees up capital for other uses – to be invested in other productive activities, and to further create and distribute wealth. We're focused on the real estate industry, but we benefit the community at large."
Eagle noted that since 1985 the Center has delivered 35–40 superbly educated real estate professionals to the marketplace every year, with the total number of graduates now exceeding 750. "The Center is judged by the performance of its graduates," he said, "and over 92% of MIT/CRE grads are still in industry — a remarkable number in a business that is so competitive, entrepreneurial, and fragmented even today."
Challenges Bring Opportunities
Speaking directly to current concerns in the real estate market, Eagle said, "The sub-prime mess we're in now is a reminder of how quickly excesses can cause major disruptions in the real estate markets; how quickly capital markets can re-price risk when things don't go the way capital expects it to go; how quickly real estate capital can become illiquid, even where there's a lot of liquidity around. Real estate is a very capital-intensive business," Eagle said, "and future capital needs will be enormous."
But as he had in the 1980s when the real estate industry was facing great difficulties, Eagle emphasized the opportunities that challenges bring. "The global real estate market offers tremendous opportunity as the world's population increases," he said. "Currently there are 6.5 billion people in the world – projected to be 9 billion in 2050, and bringing a huge real estate demand. And the considerable technical advances in information technology, healthcare, transportation, and communication will drive real estate demand even more," Eagle said.
"Huge money will be needed to finance growth over the next 50 years, opening the door for investment management and capital formation. And though real estate is global in terms of its capital formation and a lot of its operators, it's still local when it comes to individual properties that require transactions, leasing, research, and information. This is all opportunity."
Stay Connected
Underlining networking as an essential element in the real estate profession, Eagle exhorted the graduates to stay connected. "I've got some advice for you. Contact the alums in your field, and get active in the alumni association. It's an incredible global network of real estate intelligence and contacts," he said.
"We have grads on the ground in every real estate market. You are now a member of a professional real estate club like no other. Over 90% of our alums are still in the business worldwide. Members of this club are loyal to each other and to the Center."
"We have Center graduates in 44 states and 30 countries – 40% in development, 20% in investment management and banking, 15% in real estate finance, 15% in consulting research, 10% in government, nonprofit, and real estate services sectors. About 20% have their own businesses. Over 300 graduates are in senior level positions with 150 of the world's largest and most recognized firms," Eagle said.
Parting Words
Closing his address by assuming the mantle of an industry father, Eagle shared a few final principles and words of advice. "Never stop learning," he said. "Work hard, but work smart. Stay true to integrity and ethics; our industry could use a dose of those."
"And remember that though real estate is global, at the operating level it's still very much a local business. You cannot meet Hartford's office building demand with Houston's office building surplus," he said.
Eagle closed his address with, as he put it, "one last piece of advice that will help you considerably over time." Concise and potent – like a haiku or mantra – it was the kind of statement that could be pondered for decades to fully appreciate.
"A mortgage by any other name is a partnership," Eagle said. "Think about that."
