These may be hard times in the commercial and industrial real estate business, but no less a personage than Trammell Crow himself was in town this week with a message of encourgement.
Crow, the Dallas entrepreneur who founded the company that bears his name and turned it into the nation's biggest commercial developer, dismissed as contrary to human nature any futurist predictions that computers and new forms of telecommunications will replace offices and shopping centers, and he said it's possible to make good money even during a recession.
In a luncheon speech to the National Association of Corporate Real Estate Executives at the University of Maryland, Crow said he simply doesn't believe that catalogues listed on home computers will keep people out of shopping centers, or that electronic hookups will make conventional offices obsolete.
"The American economy is growing, it will continue to grow, people are going to work and they are going to have to have a place to work. It will be in a building, it won't be at home," he said.
Crow's assessments carry weight because he has demonstrated a consistent ability to make money in real estate development through good times and bad. Even 1982, he said, was "a hell of a good year" for the Trammell Crow Co., which started about $1 billion worth of construction last year to add to the $4.4 billion already in place.
He no longer exercises day-to-day control over the Trammell Crow Co., but he does run the hotel division of his family's separate enterprises. He said he knew from that activity that telephone and computerized conferences "won't take the place of conventions or meeting such as this one." Convention facilities will thrive, he said, because "it's just not human to eliminate the human contact."
As for shopping by computer, instead of at the shopping center, Crow said, forget it.
"I don't believe it," he said. "I don't believe people will shop by computer. It's not going to be that way. Shopping is a diversion; it's the biggest sport that people participate in in the world today. I remember in World War II, we had gasoline rationing. Everybody saved their gas tickets to go shopping. Nobody failed to go shopping even when the goods weren't on the shelves."
In an interview before the speech, Crow and J. McDonald Williams, the company's 41-year-old managing partner, said their experience has shown that commercial real estate developers and operators can make money regardless of a slump in the national economy.
"We don't deal in the realm of statistics about the economy," Crow said. "You deal in a local market, and in the individual project in that market."
"Some industries languished last year but some grew," McDonald said. "The growing industries in the growing regions are where we did our best business--the west coast, the southwest, the mountain area. We are not in Detroit or Buffalo."
The Trammell Crow Co., through its offices in Bethesda and Washington, is currently building an industrial park in Rockville, an office building on the Georgetown waterfront, and a warehouse and service center in Herndon, all projects that they say can succeed even in the face of overbuilding and recession.
Office demand may be slumping downtown, Crow said, but "Georgetown is not overbuilt. Don't worry about us on that project, that project will go." The Trammell Crow Co., in fact, is not even participating in downtown development because, as local partner Ben C. Paden Jr. put it, "we opted out" of bidding for sites when land prices soared over $500 per square foot.
Williams said the company's growing presence in the Baltimore-Washington area "indicates our confidence in this area for the long run.