Editor's statement.

The Global Cities Conference at Harvard Design School occurred almost exactly one year after 9-11. Up to the day of the conference, we along with our partners in the conference, the Royal Institution of Chartered Surveyors, the RICS Foundation and The Counselors of Real Estate, feared that a repeat terrorist incident would throw the world again into turmoil and cause the conference to be cancelled. Many flights were in fact cancelled and hotel rooms in Boston-normally very tight in the Fall-were available at bargain prices.

As we now know, the one year anniversary of 9-11 occurred without incident, and we all breathed an enormous sigh of relief. Still, the events of a year before had a profound impact on the substance of the conference. The long-term implications for urban development are just beginning to be recognized. The immediate impact, however, on real estate--from global investment to local confidence in urban redevelopment decisions--are being felt in every aspect of the industry.

The substance of the conference is reported in a series of articles in this volume. At the time of this writing, however, certain aspects stand out. The theme of the conference--competition among global cities--was brought home through a number of different dimensions discussed on the various panels. The term "global cities" refers to a select group of "world-class" cities that compete with one another for capital, investment, companies, sporting events, world fairs, art exhibits, and a host of other activities that give them prominence on the world stage.

The conference featured many more cities than the top one or two cities in each of the major countries represented. For example, New York City may hold the top spot in the United States, but Los Angeles, Chicago, Boston, San Francisco, and even Las Vegas, among others, are in competition not only within the U.S. but also with major cities around the world. As instantaneous communications, fluid capital, free trade, and more open markets make the world ever smaller, cities must work harder to create the kinds of environments that are attractive to companies. A number of speakers reiterated the relationship between the urban fabric and quality-of-life in cities--how certain cities, like London and Paris, have managed to preserve a special quality while remaining competitive.

Joel Kotkin created somewhat of an uproar by arguing that great cities today are not automatically destined to become even greater: "The real question for cities is what role they can play in this new economy. Those that find niches will thrive; those that don't are doomed to stagnate or decline. In the end, Cities are an act of Inspiration and Vision...where the Vision has failed, so has the city. Successful cities must inspire or die." Other speakers were much more upbeat about the future of cities. Certainly, Dame Judith Mayhew, head of the Corporation of the City of London, and Governor Ed Rendell of Pennsylvania, while recognizing the challenges that cities face, were optimistic about the many positive steps that well-motivated city leaders can take to improve the competitive positions of their cities.

Lawrence Summers, President of Harvard University, spoke about Harvard's own real estate expansion. Over the next twenty years, a substantial part of the university will be located across the Charles River in Aiston on land owned by the university. He underscored the fundamental importance of creating a unique sense of place in order to motivate Harvard's graduate schools to move to a new campus. He also spoke of the implications for a sustained period of low inflation and low interest rates, and the special problems of managing an economy when interest rates are so low that monetary policy has little room to maneuver.

If there was a consensus to be heard among the participants at the end of the conference, it was that the ever-shrinking world makes our understanding of the forces that make cities rise and fall ever more important. We still have much to learn about the complex interaction between private investment and public policy-what cities can do to make themselves more attractive and more competitive. People in the real estate industry have a unique lens through which to view the growth and decline of cities. If the conference improved our understanding of the forces that influence urban futures, then it could be deemed a success.

This issue is a first-time collaboration of the American Real Estate Society, The Counselors of Real Estate, and the RICS Foundation to produce a joint issue of the Journal of Real Estate Portfolio Management and Real Estate Issues. It combines articles about the Global Cities Conference with related papers on international real estate investment. I am indebted to my colleague, Hugh Kelly, for managing the collection and assemblage of articles for The Counselors. Stephen Brown, Director of Research for the RICS Foundation, and I have worked together to assemble the articles for the refereed section of the journal. These articles have passed JREPM's standard blind review process for inclusion in the journal. We are particularly grateful to a number of reviewers for JREPM who have turned around reviews in a record-short period of time. We are also indebted to the authors who have responded in equally short time to requests for revision--some minor, some substantial.

The issue contains four articles that are part of the refereed-paper section. All four address aspects of international real estate investment. With the exception of Glenn Mueller and Randy Anderson's article, "The Growth and Performance of International Public Real Estate Markets," the articles focus on real estate in individual countries. Collectively, they provide new insights into important real estate issues in Europe and Asia.

Glenn Mueller and Randy Anderson assess the growth of public real estate markets around the world. They note that the U.S. market is by far the largest; other markets have yet to reach the size that give institutional investors sufficient liquidity. They conclude that public real estate markets for the most part offer investors attractive returns and low correlations. However, for a number of reasons cited in the paper, public real estate markets in most countries still have a long way to go to attract significant institutional capital.

Richard Feiser and Bing Wang focus on non-performing loans (NPL) in China --one of the most important problems that China must resolve as part of its entry into the World Trade Organization and imminent competition from western banks. Peiser and Wang evaluate fifteen major issues that must be addressed in order to reduce uncertainty and motivate foreign investors to enter the Chinese NFL market in force. They conclude that the Chinese have demonstrated a strong commitment at the national level to deal aggressively with the NFL problem, but it remains to be seen whether foreign investors will be able to get control of real estate assets quickly at the local level and convert them into cash - a necessity if China is going to realize higher NFL recovery rates and lower ultimate losses from bad loans.

Sofia Dermisi reports the results of a survey on how the Internet is currently being used by owners, brokers, and investors involved in the office market in Boston and London. She finds that the Internet is still being used primarily for information gathering and dissemination. It is significantly reducing the total processing time for lease and sale transactions, but it has yet to be used very much to consummate actual transactions. She concludes that a common online platform will enhance the transparency of transactions, but the major participants--brokers, lawyers, and appraisers--will resist the implementation of such a platform as long as they feel their income is threatened.

We trust that members of the American Real Estate Society, The Counselors of Real Estate, the Royal Institution of Chartered Surveyors, and the Harvard real estate community will find the Joint Issue of interest. Through better understanding of what is occurring in different parts of the world, meetings like the Global Cities Conference hopefully give each of us better insight into our own small part of the world, and how it fits into the larger picture.

Richard Peiser

Cambridge, Massachusetts

Stephen Brown

London, England