When the self-made chairman and chief executive of real estate giant Boston Properties offers career advice, it is worth a listen.
Mortimer B. Zuckerman sat down recently with Carlyle Group co-founder David M. Rubenstein for a breakfast conversation hosted by the Economic Club of Washington (Capital Business was a media partner).
Rubenstein asked Zuckerman what he might do today if he was to start over, with no money.
Real estate would not be Zuckerman’s first choice.
The market for commercial real estate is “changing dramatically in the context of a world where people don’t have to go to offices now, where you can actually interact with your business colleagues or do your business online.
“So I think office space, except the kind of space we are in, is going to be under real pressure. If I was going to go in real estate I would concentrate much more on residential real estate.
“But I don’t know that I would be in real estate. I would try to find some way to get in the online world. It is so explosive now and so transforming. So many people are going to have a chance to be very creative and do new things that will change some part of life. To me that’s as good as it gets, when you can do things that really make a difference.”
Zuckerman, though, is still in the real estate business. His firm has a strategy of developing A-quality buildings in A-quality locations because those prime properties tend to fare better than others in good times and bad.
But he offered a hint that the market, so strong in recent years in places such as Washington, may not stay that way.
“There is a sustained value that is not based on rents as much as it is based on low interest rates,” Zuckerman said.
Left unsaid is the fact that one day those rates will move up.