This past February, The Economist magazine had one of its periodic special inserts titled: “The Gods Strike Back.” While it focused on the lack of risk management in the financial services industry in general, it contained a number of lessons we in the real estate investment management business can and need to learn. It struck a particular chord with me as over the past 18 months or so I have been helping several large institutional investors work through their “challenged” real estate investments. The thrust of The Economist article is how very few financial managers really had a risk management culture or function or, even if they did, how even fewer executed it correctly.

My recent experience, which has involved digging deeply into the decisions of many sophisticated real estate investment managers, convinced me that, as an industry, we really haven’t learned how to analyze and manage investm