Learning Real Estate Development (in Nairobi)

High-rise Construction 101... That's me standing in front of International House in Nairobi, Kenya, two weeks ago. Thirty-five years ago, my boss in Geneva, Switzerland, asked me to fly to Kenya to monitor the development of this property.

When I first traveled there in 1970, the steel was up about six stories toward its eventual height of fifteen stories. It was the first high-rise building under construction that I had ever really examined. I was twenty-six. This was my first commercial real estate job.

The project manager, an older British expatriate of Churchillian dimension, was going blind. So it was literally and figuratively the blind leading the blind.

The developer was a subsidiary of Bernie Cornfeld's mutual fund empire I.O.S. (Investors Overseas Services). My boss (in theory) oversaw the development for the parent company. (See Do You Sincerely Want to Be Rich?: The Full Story of Bernard Cornfeld and I.O.S. by Raw, Page and Hodgson.)

Within a year I.O.S. would collapse spectacularly, due to a combination of poor investments, sales hype and outright fraud. And to this day, Robert Vesco, who looted the company, remains a fugitive from U.S. justice, living in Cuba.

But youth is grand, and for a year I traveled back and forth to Nairobi learning the real estate business -- preparing a marketing plan, coordinating the creation of a standard lease and developing a tenant improvement package. In 1971 International House opened as the premier high-rise office building of its day.

Today downtown Nairobi is vibrant with people and traffic as the economic capital of East Africa. International House is now dwarfed by many newer high-rises, but it has a special place in my heart.

So it was a treat for me to have my brother, Bruce, take my picture in front of the building, although you'll notice that the guard approaching to my right was not happy -- bluntly instructing us not to take pictures. I doubt that he would have been impressed with my involvement in its development! (Yes, my buzz haircut reflects two weeks in the bush, much to my wife's dismay.)

-- Peter Pike