Interview ... Hamid Moghadam, CEO
AMB Property Corporation
AMB is one of the nation's largest REITs. As of March 31, 1999, AMB owned 615 industrial buildings (and 38 retail centers) totaling 66.0 million square feet located in markets nationwide, including Atlanta, Boston, Chicago, Dallas/Fort Worth, Los Angeles, Miami, Minneapolis, Northern New Jersey, the San Francisco Bay Area and Seattle. AMB is an early investor in Webvan, the Internet grocery store, reflecting its strong interest in the connection between distribution, logistics and e-commerce... Moghadam responded to the e-mail questions on July 8, 1999.

Q: What is the investment focus of AMB?

A: High throughput distribution properties ("HTD"). These are assets that by virtue of their location, physical attributes, and/or tenancy, expedite the movement of high value goods through the supply chain. We call this "e-Space" which stands for expedited space. We are all about speeding up the supply chain. The other companies in our business are all trying to compete with each other to do build-to-suit projects for the Fortune 500. To what purpose? To store their inventory. Our goal is to eliminate static inventory; the competition's success is based on maximizing inventory!

Q: How will the Internet impact the use of property?

A: Huge. Many forms of retail become vulnerable to one degree or another. The need for non-strategic business travel will also be reduced. Some forms of industrial (i.e., properties designed for pure storage and located in the middle of the boonies) will have lower demand. We think HTD and e-Space are going to be big winners in the networked economy.

Q: How does AMB benefit from intranet and extranet capabilities?

A: We can use intranets and extranets for more efficient communication and as tools for achieving "virtual integration" with our customers and alliance partners. Our organizational model is based on outsourcing, collaboration and alliances. Our competition is based on vertical integration (remember Henry Ford). The new networked economy will favor our model.

End of Interview

Note: For further insight into AMB's strategy, listen to AMB's Quarterly Earnings Conference call to be broadcast over the Investor Broadcast Network Thursday, July 22, at 2:00 p.m. EDT. It's another cool use of the web.

Recommendation: Moghadam suggested two books that provide further insight into the new digital economy: "Direct from Dell: Strategies that Revolutionized an Industry" by Michael Dell and "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail" by Clayton M. Christensen.

--Peter