U.S. property barons yield to specialists

By Ilaina Jonas

NEW YORK (Reuters) - Real estate magnate Sam Zell likes to say that 30 or 40 years ago, a group of about 75 men who controlled most U.S. commercial real estate did it all. Since then, commercial real estate has gone from the backroom boys to the specialists as every aspect of the sector's sales, finance and management has become more expensive and complex.

Commercial real estate now stands as a separate asset class, alongside stocks and bonds. The jack-of-all trades owners who made decisions by gut instinct have given way to educated specialists: property managers, financial engineers and portfolio managers who use esoteric mathematical formulas to measure risk and return.

Even the companies themselves now tend to focus on one type of real estate -- Simon Property Group Inc (SPG.N) on shopping centers, SL Green Realty Corp (SLG.N) on New York office buildings, AMB Property Corp (AMB.N) on warehouse and distribution centers, AvalonBay Communities Inc (AVB.N) on apartments.

"I think biz has evolved," Scott Latham, Cushman & Wakefield executive vice president of Capital Markets Group, said at the Reuters Global Real Estate Summit in New York.

The leadership changes at Macklowe Properties and Boston Properties Inc (BXP.N) underscore the changing of the guard at two of the most influential owners and operators.

Harry Macklowe, a college dropout, is considered one of the best real estate minds in Manhattan. The General Motors Building on Fifth Avenue is likely his greatest achievement as well as his biggest loss.

He bought the 50-story building in 2003 for $1.4 billion and transformed it from a lackluster performer with an empty underground concourse to a most desired building, home to a 24-hour Apple store with an iconic glass cube for an entrance.

But in June he sold it after defaulting in February on a loan used to help buy seven buildings formerly owned by Equity Office.