PLAN 77: Article
Real Estate Center Marks A Milestone

Three Days of Anniversary Festivities

The Center for Real Estate celebrated its 25th anniversary this fall with three days of festivities including a dinner for industry partners at the MIT Museum, a day-long conference held atop the new Media Lab Complex and a black-tie gala at Boston's InterContinental Hotel attended by more than 280 alumni, students, faculty and friends.

Founded in the 1980s as the Center for Real Estate Development, MIT/CRE was the brainchild of Charles ‘Hank’ Spaulding, who collaborated with John de Monchaux, then dean of MIT's School of Architecture + Planning, and MIT Professor Lawrence Bacow, now president of Tufts University, to establish a first-rate graduate education and research program in real estate. More than 800 graduates of the Center are now working in countries around the world.

The anniversary conference in October began with a panel on financial re-engineering moderated by William Wheaton, previously Director of the Center and currently a Professor of Economics in the departments of Economics and of Urban Studies and Planning. With an overflow crowd of nearly 300 guests, the program got underway by trying to identify the most critical factor in creating the current economic crisis, a crisis with real estate at its core. The ‘shadow banking system’ was an immediate response to the question, although it was also noted that the financial system has grown so complex that systemic shocks remain possible even if all the parts seem to be working well. Securitization was identified as another possible cause of the crisis, as was imperfect regulation.

Having discussed the possible culprits responsible for the financial collapse, Wheaton asked the panelists what policies they would want to change in order to prevent another fiscal catastrophe in the future. A new regulatory body was proposed but the prospect of giving the federal government more regulatory power didn’t sit well all around. Another proposal was to create a new federal agency similar to the National Transportation Safety Board, with no regulatory responsibility to conflict with its management of systemic risk. The need to better understand systemic risk led to enthusiasm for a new Office of Financial Research, intended to produce credible public insight into the implications of new financial practices in a globally interconnected economy.

The second session of the conference, moderated by MIT/CRE Chairman Tony Ciochetti, focused on re-engineering buildings, a particularly important topic since 39% of all energy consumed in the US Is consumed by buildings. (When the energy required to manufacture the buildings’ steel, glass and concrete is factored in, the percentage climbs to nearly 65%.) How to reduce that excessive consumption through better design was the focus of a talk by SA+P’s John Ochsendorf, Associate Professor Building Technology, about MIT initiatives to aid architects and builders with life cycle planning for buildings, aiming to develop ways to reduce emissions and costs at every stage of a building's life.

SA+P’s Sandy Pentland, Director of MIT’s Human Dynamics Lab, talked about how buildings are used, and how that use can be coordinated and reorganized to make buildings more efficient and productive. Citing research that shows that roughly 80 percent of complex information within an organization flows from person to person in face-to-face communications, he recounted research at a Bank of America call center that resulted in a very small change in the timing of coffee breaks; by increasing face-to-face communications, that tiny change, which cost the company nothing, saved the company some $15M annually at that one center. Noting that it is possible to predict a wide range of things by gathering and analyzing data from many different sources – such as cell phone data, credit card data and transportation data – he suggested that understanding and predicting human behavioral patterns could promote a very different view of development.

A third presentation in that session, from Sarah Slaughter, who coordinates the Sloan Sustainability Initiative and manages the Sustainable Business Laboratory (S-Lab), focused on high performance buildings that enhance the health, safety and well-being of their occupants, noting that the impact of the built environment on our health and well-bring is enormous because Americans are estimated to spend over 85 percent of their time indoors. Slaughter cited studies that show immediate, quantifiable benefits for the creation of sustainable and resilient buildings in terms of capital costs, increased workforce productivity and higher rental rates, including near-term opportunities to reduce energy and water use by over 40 percent through building and infrastructure upgrades.

Following the conference, guests were offered the chance to tour SA+P’s new Media Lab Complex, as well as MIT’s new Koch Cancer Institute and the new Sloan School Expansion.

The following night, guests at the gala were treated to a video look back at the Center’s history through the eyes of some of its founders, alumni and current staff and featuring some of the major projects on which alumni have worked. You can watch the video online at techtv.mit.edu/collections/sap:885.

Another highlight of the gala was the presentation of three Visioneer Awards, given every five years to honor visionaries, pioneers and engineers who have demonstrated ‘the combination of extraordinary perceptiveness and sustained achievement over a period of many years’. This year's awards went to Jonathan F.P. Rose, president of the Jonathan Rose Companies, a green real estate policy, planning, development, owner's representative and investment firm; to Google, which was honored because ‘the company's innovations are transforming the way we design workplaces and revolutionizing the way we think about and use space – the essence of real estate’; and finally to founder Hank Spaulding, the ‘original visioneer’. ‘He has touched the lives of thousands,’ said Chairman Ciochetti.

It was an award-winning night as the Spaulding Award was presented to Michael J. Smith, Class of 1987, for his work at LCOR developing the 2.7 million-square-foot North Bethesda Center in Maryland, which Smith described as ‘a truly transformative and forward-thinking project’.

The evening culminated with a live auction that raised more than $20K for the MIT/CRE Fellowship Fund.

This story is based in part on reporting by Peter Dizikes and Jim Smith.