Jeffrey C. Hines, President/CEO of Hines

GlobeSt.com: With the recent deals we've reported, it seems your work these days is more international than domestic. Is that fair to say?

Hines: We're opportunity-driven, and we tend to go where it makes sense to do deals. So you'll see us do more international deals over the next 18 months or so. Our balance between international and domestic activity switches, actually. Over the past few years, we had switched back to more of an emphasis on domestic deals because of the strength of the US market. Prior to that, it was more international.

GlobeSt.com: What are the relative benefits of international investment now?

Hines: Right now, there's quite a bit of money in Europe, particularly in Germany through open-ended funds that are taking advantage of the returns relative to the stock market and the better fundamentals. There's a lot of capital available for high-quality buildings in Europe. But there is still a surprising amount of demand in the US for high-quality real estate. In all, the investment market is, obviously, a littler healthier than the leasing market is right now.

GlobeSt.com: What is your development strategy going forward?

Hines: There certainly isn't much in terms of new product in the US pipeline right now. We don't expect to see much development here until six months to a year from now--and the first coming out of the ground will be build-to-suit projects. We anticipate that acquisition opportunities might pick up again just a few months prior to the resurgence of US development. Now in Europe on the other hand, we're seeing development opportunities.

GlobeSt.com: Where specifically do you see European opportunities?

Hines: There are a lot of development opportunities in emerging markets, such as Moscow and in Eastern European countries such as Poland and maybe Hungary. And you can bet that if the bulk of Eastern Europe joins the EEC, they'll be some more interesting opportunities throughout the continent. By the way, we're also seeing opportunities in China, Brazil and to a limited degree in Mexico.

GlobeSt.com: But with Europe feeling the pinch of recession more, isn't that likely to dampen your expectations?

Hines: Everything we've heard indicates that the European economy is experiencing a slowdown and not a contraction. Growth will slow, but it won't slip into a recession as in the US. Of course, we could be wrong; predicting the demand side is the toughest part of this business.

GlobeSt.com: You mentioned the US recession. What does it look like from your vantage point now?

Hines: I feel better than I did a couple of months ago.

GlobeSt.com: Do you think everybody does?

Hines: I think so. There are two possible outcomes of Sept. 11. Clearly, we were already in a slowdown. The attacks may have compressed the cycle and made it more V shaped, accelerating everything. The other theory is just the opposite, that it may have caused a longer contraction. I think that's the less likely scenario.

GlobeSt.com: What does that mean in terms of a real estate recovery?

Hines: In terms of a general recovery, we should start to see improvement in the second or third quarter, and since real estate lags six to 12 months behind that, that's when we'll see fundamentals improving again.