Ensuring the safety and security of U.S. embassies and ambassador residences globally are of prime concern to David Lauster, CCIM, CIPS, CRS, senior realty specialist for property acquisitions at the U.S. State Department's Bureau of Overseas Buildings Operations.
“The laws in the U.S. generally do not change very quickly, whereas in other parts of the world, entire governments can change overnight,” Lauster says. “You might have gone to sleep with a liberal government in power, only to awaken the next morning to discover that a very conservative government has taken over.” A 12-year veteran of the U.S. State Department, Lauster discusses his experiences with Commercial Investment Real Estate.
CIRE: What made you decide to work for the U.S. State
Lauster: I started in commercial real estate back in the early 1980s when syndication was big. I was hired by a broker to find small shopping centers they could syndicate and resell. But paychecks were too few and far between, so I moved my focus to the residential real estate sector. In
2004, this job opportunity opened up, and that is when I came over to the U.S. State Department.
There are two sides to the real estate business: residential and commercial. You can do one exceptionally well, but it’s highly unlikely that you are going to do them both exceptionally well. So pick a side, do it, and do it right. With that in mind, I knew that if I was going
to be managing large commercial transactions for the U.S. government, I needed to get serious, and, of course, that is what the Department wanted me to do. They immediately put me to work finding office space and buildings around the world.
CIRE: What were the initial challenges in coming from the
private to the public sector?
Lauster: The greatest hurdle was, and continues to be, dealing with the bureaucracy of doing business within the government. Everything takes time. It is nice having a principal that does not have to obtain financing. The United States is my principal and my employer. By the
same token, you have to clear many layers of approvals to get things done, and that can be a headache.
CIRE: How would you describe a few of your recent projects?
Lauster: The security hitches are the biggest part of any project. I am currently trying to find office space in one of the former Yugoslav republics. One of our headaches is that we cannot find anything near the center of town that has the sufficient amount of setback and safety
features that we require to minimize the risk to our Foreign Service Officers and locally hired staff.
Our diplomatic locations need to be near the heart of a city, so the population can get to them for visa applications and other services and where the diplomats who are working for us can interact and meet with their host government counterparts. You cannot afford to be too far away
from the downtown area.
CIRE: What are the unique challenges you face in today’s
Lauster: A few years ago, we sold our Embassy property in London to a major Middle Eastern development group. The proceeds of that transaction made the construction of our new Embassy possible. We are leasing the old embassy property back until our new Chancery across the river is
completed. Then you have the security requirement (and cost) of providing 24-hour surveillance and making sure no one can get in and plant devices during construction (like they did in Moscow).
In addition, you have to keep in mind that housing for our diplomats must be close enough for them to get to work safely and for their children to attend good schools. We are always working to meet both the residential and office needs of our posts, so this presents its own series of challenges
when looking for property.
CIRE: What advice do you have for brokers who deal in
volatile global markets?
Lauster: You must keep a close eye on the currencies, and you have to be a bit of a prognosticator. You are evaluating the decisions the host government is making and how they could affect your clients, whether abroad or here in the U.S. You are also trying to figure out if this foreign
government is going more to the left or to the right. Are they becoming more pro-business? Or will they try and exert more control, maybe raise taxes, or otherwise make it difficult to do business there?
CIRE: How has the CCIM designation helped you to adapt your
skills to global acquisitions?
Lauster: When I took this position, I knew I wanted my CCIM designation because I knew I was not equipped for the commercial transactions in which I would be involved. The quality of the CCIM training and instructors is outstanding. CCIM instructors are knowledgeable, engaged, active in the
market, and they aren’t just there to teach. They are actually doing business on their own, which I think is an enormous part of instructors being effective. They are in the trenches themselves, so they know what really works in practice.