Developing in Emerging MarketsLessons Learned from Washington to Warsaw

December 6, 2014FIABCI

Glenn Williamson

The Atrium at Nevsky 25, St. Petersburg, RussiaClass A Office and Retail Center developed in 1997 by a Russian-European-American Partnership. Winner 2000 FIABCI Prix d’Excellence Best Office Project

EU Emerging MarketsProzna Street Poland

• Warsaw was leveled in WW II. • US-based Jewish Renaissance

Foundation aims to restore a historic ‘Belle Epoch’ block in the former Warsaw Ghetto.

• Right of Perpetual Use, s/t completion by 1997.

• Contract signed in 2002.• Site acquisition in 2005.• Austrian firm Warimpex

completes the award-winning renovation in 2012, and sale in 2013. Next phase pending.

EU Emerging MarketsGdansk Shipyard Poland

• Where WW II Began in 1939• End of Post-War in 1989• 60 hectare waterfront site• Adaptive re-use for center

city mixed uses• Secondary City• Absorption Rates

EU Emerging MarketsSofia, Bulgaria

• Zoning Risk:– ‘Right to Construct’

means no change in use if ever rebuilt.

• Environmental Risk:– EU inspired noise limits

require relocation of rooftop A/C unit.

• Cap Rate Compression, yes;• But a Thin Emerging Market

DC Emerging MarketKingman Island

1996 NPS transfer to DC has a hand-written reversion clause if the original plan isn’t built.

Transferable Concepts

• A Right to Day Light (in not so sun-drenched places)

– UK – Poland

• U.S. LEED EQc.8.1– 70% 1 point– 90% 2 points

Conflicting ConceptsResponsibility vs. Liability

• Fire Safety– Should the tenants stay

to save the Building, or – Leave immediately to

save the People?– Use of Asbestos Cement

Crazy Concepts

• US Liability Laws– Sheer Size of Potential

Damages– Liability Insurance

• Death• Slip and Fall• Earthquake

– Risk Management• Away from axes…• Try to see things the way the

other is seeing them“Heeeeer’s Johnny!”

Change Agents and Policemen

• Global Capital brings with it global lending rules– Environmental Standards

arise when banks won’t accept liabilities.• Asbestos• Leaking UST

• Emerging Financing Sources– Shariah Finance– Russian Private Equity

Getting into Alignment

• Equity Source(s)• Debt Source(s)• Local Contractor• International Tenants• Consultants & Advisors• Development Firm• You

Oddyseus

Opportunities for Idea Exchanges

• Chinese Students at GU– LEED Platinum A/C– Open connections vs.

secure super blocks

• GU Students in Europe– European Design to US– US Management to EU– Senior / ADA Housing