Editor's statement.

I recently enjoyed a lengthy conversation with a friend concerning the operation of our respective firms. She is a land use lawyer with one of the best (and largest) law firms in the Northeast. By comparison, my company, Hartford. Conn.-based Bartram & Cochran, is a small boutique firm with a national consulting practice. One of my questions to her during our discussion focused on what criteria should be used in determining how to equitably set base compensation and bonuses for my firm.

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Quickly writing her answer on a paper napkin (gives you a sense of where the conversation was taking place), my friend laid out the following criteria to which her firm subscribes: education, recruiting, governance, participation in the community, new business development, billable hours and general practice. Upon reviewing her criteria a second time, they made even more sense to me, as they are in the DNA of each CRE member. I look forward to incorporating that criteria into our compensation plan going into next year.

As I sat down to write this column, those criteria again came quickly to mind as I reviewed the Roundtable (which can be found on pages 1-6 of this edition of REI) with our three incoming 2007-08 leaders: Chairman of the Board Rich Hanson, CRE, principal of Mesa Development of Chicago (a national developer of residential and mixed use properties; CRE First Vice Chairman A. C. Schwethelm, CRE, president of A.C. Schwethelm & Associates (appraisal services and litigation support firm) of Comfort, Texas; and CRE Second Vice Chairman Art Pasquarella, CRE, a principal and chief operating officer of BPG Properties, Ltd. (private equity real estate fund manager) of Philadelphia, Pa.

These three leaders have important characteristics in common. Each believe in education, apparent by their schooling and involvement in CRE conventions and meetings. Each recruits new members to our organization by setting an example by their high caliber and character, and by sponsoring new members. Each believes in governance, demonstrated by the service they have provided their fellow CREs and the industry by their service on many CRE committees. And each participates in his local communities, a trademark of members of our organization.

I'm not quite sure if the new business development refers to all of the members that they will get to know more closely over their respective terms in office or if the billable hours and practice should refer to the hours they are foregoing to be of service to our group, or the fact that they still run and maintain incredibly complex and demanding positions in their own companies. But all three possess the character and professionalism that defines a CRE, and we all benefit from their willingness to serve as CRE leaders.

REI sat down with Rich, A.C. and Art and asked what projects they are currently working on, what they view as key issues that are impacting the real estate environment and how the CRE organization is meeting those challenges. I'm confident you will find their thoughts and comments insightful.

The rest of this issue's articles fall into four broad categories: Law and the Land, Finance, International Issues and Ethics.

In the feature article "Conservation Easement: Windfall or Straightjacket?," co-authors James D. Timmons and Lara Daniel address the various types of easements, how they are being used and legal aspects and tax implications that accompany such easements. For anyone working with local land trusts or conservation groups, this article provides many points for discussion.

Another form of land management is covered in the feature article "Unintentional Redlining? Zoning Ordinances and the Living Wage" by Patricia S. Wall, Esq. The article poses an important question: Are city council proposals to raise the minimum wage for big-box retailers within the limits of most cities a form of unintentional redlining, since the stores and associated jobs would migrate from lower-income sectors to peripheral areas? The Community Reinvestment Act of 1977 outlawed the practice of "redlining," in which lenders deny loans based on the applicant living in certain low-income areas rather than on the applicant's qualifications for their services. The article provides case law in the area and an in-depth analysis of this trend.

Joseph S. Rabianski, Ph.D., CRE, provides further insight into his previously published article "Comments on the Concept and Definition of Highest and Best Use," that appeared in the Spring 2007 edition of REI (this article can be accessed online at www.cre.org/publications). The follow-up article, "Comments On the Probability of Rezoning," expands on determination analysis and explains that the analysis can be flawed if legal permissibility is contrary to the economics of the property market.

One of the major benefits of CRE membership is the ability to share ideas and perspectives. It is the hope of the REI Board that more members and readers will respond to issues by submitting perspectives for publication in future REI editions. We encourage readers of REI who see articles of interest to send authors' names to info@cre.org. Board members will locate authors and inquire whether they have articles that are appropriate for REI.

The finance feature article "Commercial Real Estate Derivatives: The Developing U.S. Market" by Jim Clayton, Ph.D., is an expansion of "The Dynamics of Derivatives" presentation which Jim delivered at CRE's 2007 Midyear Meeting in Montreal. His presentation was so well attended and the response so high that REI wanted to expand on the topic. This piece provides the background for both those who are new to the derivatives market or are more advanced in the use of this finance mechanism.

On the international front, Barry Gilbertson, CRE, PPRICS, presents his perspective on "What Is Driving the Change in the U.K. Retail Market?" As Barry says in his introduction, the purpose of the article is "to draw, in the mind of the reader, a similarity or contrast between the U.K. and the property market in which the reader operates." The restructuring in the U.K. retail market affects all markets and it impacts those who develop or invest in retail development.

This issue concludes with two resource reviews. One review is on a book that deals with international issues, and the other on leadership and ethics. In his review of Michael Ball's Markets & Institution in Real Estate & Construction, P. Barton DeLacy, CRE, FRICS, who serves as associate editor of REI, notes that the book is important for those working in the field of international comparison analysis. Markets & Institutions, according to Barton, "produces an analysis on property markets across Europe in an attempt to integrate academic ideas of international economics, measurements and models into the real world of practitioners."

In his review of real estate icon and CRE Buzz McCoy's Living Into Leadership, A Journey in Ethics, Kenneth P. Riggs, Jr., CRE, brings us to the heart of the book. Living Into Leadership is not Buzz's autobiography; rather, it is a series of stories that tap into Buzz's remarkable career to help each reader determine his or her own unique legacy.

I want to thank P. Barton DeLacy, CRE, managing director and national practice leader for corporate valuation consulting at New York-based Cushman & Wakefield, for his service as associate editor of REI. A long-time member of the REI board, Barton brought a vision and energy to REI, and his contributions are clearly visible on the pages of this journal.

According to CRE membership surveys, Real Estate Issues is consistently rated as one of the most important benefits of belonging to the CRE organization. But survey numbers can never be as meaningful as a sentiment that was recently expressed in a letter from CRE Wayne Grinnell of El Paso, Texas. Wayne writes:

"One of the items that impressed me years ago when I first was

introduced to the CRE organization was the REI publication.

"Still does, as a new member. It far outshines my other primary

professional publications in terms of variety, practical information

and interest."

The editorial board and I are very proud of this publication and gladly offer our time and energy to its creation. We hope that you, like fellow Counselor Wayne Grinnell, find it valuable and insightful.

One of the benefits of serving as REI's editor in chief is reading all of the features, insider perspectives and resource reviews that come across my desk. It makes me proud to be associated with such a unique group of individuals who have so much to offer their fellow CREs and their industry. It also stokes my appetite to read more. My goal and mission, which are shared by the REI Board, are to persuade more of my fellow CREs to put their expertise, perspectives and thoughts on the pages of REI. REI is our forum. REI is our journal. I hope to see your thoughts and perspectives land on my desk in the very near future.

BY MAURA M. COCHRAN, CRE