Five decades ago, the commercial real estate industry was poised at the transition of private ownership and wildcatter developers to become a global, public, professionalized industry with increasingly complex ownership and financial structures. Early leaders of CCIM Institute, such as Victor Lyon, CCIM, and Jay Levine, CCIM, became champions of applying the internal rate of return to commercial real estate and adopting it as the CCIM standard. By the early 1970s, IRR was written into all the CCIM designation core courses led by Stephen Messner, Ph.D., who was then at the University of Connecticut in Mansfield, Conn.
During the 1970s, IRR paved the way for commercial real estate professionals to navigate momentous changes such as the development of regional shopping centers, chain hotels, and suburban planned communities nationwide. Even nearly 50 years later, IRR is one of many practical, crucial methods to manage the increasing complexity within the industry.
“Jay Levine and Vic Lyon gave strong support to inculcating the IRR concept as a means of helping to examine commercial property investments,” says Mark Lee Levine, CCIM Senior Emeritus, JD, LLM (Tax). “Understanding the six functions of the dollar, the time value of money, and how these precepts can and should apply to commercial real estate are part of the foundation that helped build the CCIM organization and CCIM designation.
“Those who first learned of the IRR concept when taking CCIM courses were quick to understand the price of a property is only one factor affecting the investment decision. The financial terms, such as when monies were paid and the interest rate was being paid on deferred obligations, are also crucial factors to weigh in the investment decision. Through the IRR concept, Jay and Vic showed thousands of brokers why an understanding of IRR was crucial. In turn, the teaching of IRR became a hallmark of the CCIM program and remains part of the curriculum today since it continues to be relevant for investments.”
During 50 years of entrepreneurialism, exuberance, and excess, CCIM Institute has been a powerful presence, and CCIM designees remain stewards of the highest values of professionalism and ethics.
Q&A: James Bell, CCIM
1988 CCIM Institute President and retired president at the Allen Morris Company of Georgia in Atlanta
Why after earning your master's degree in business administration from Harvard University, did you enter commercial real estate?
Bell: I considered commercial real estate a career to generate income and accumulate wealth. My motivation in entering commercial real estate was to create equity through developing commercial office buildings ranging from 10,000 sf to 358,000 sf. In partnership with my father-in-law, Allen Morris, our firm built, operated, and sold office properties throughout Georgia.
How did you become involved as a volunteer leader in the early days of what became CCIM Institute?
Bell: In 1973, I was elected as a Regional Vice President in charge of membership recruitment in the southern states. Before becoming CCIM Institute President in 1988, I also served on the Budget Committee of Realtors National Marketing Institute, which included CCIM Institute, when there was serious financial difficulty. I was part of the team that helped to remedy the crisis and clean up the damage.
CIRE:What were the primary factors driving the expansion of commercial real estate during the 1960s and 1970s?
Bell: Commercial real estate is the favorite investment of those who are risk takers and can access excess capital. U.S. tax laws favor real estate investment. It's a wonderful way to get wealthy, and the CCIM training and networking with other CCIM designees paved the way for many commercial real estate professionals to launch successful careers.
CIRE: What will CCIM Institute look like in the next 50 years?
Bell: People will still require places to do business, and there will be opportunities to build commercial real estate practices. Of course, it will be different. The demands of the era will determine the size and type of practice. To be successful, CCIM designees will need to see the direction of their marketplace and stay ahead of the trends to make money.
Check out CIRE magazine's web exclusive articles celebrating CCIM Institute's 50th Anniversary. Archived pieces from the late 1980's discussing and dissecting the history of CCIM Institute.
“The First 20 Years of CCIM Institute”
“An In-Depth Look into the Origins of CCIM Institute”