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DALLAS-”Wall Street doesn’t understand Dallas. They’ll never understand Houston, TX. The farther you go south, they think it’s all cowboy hats and tumbleweeds,” said John C. Goff, vice chairman and CEO of Fort Worth-based Crescent Real Estate Equities Co. Sometimes, though, it’s even hard for Dallas to understand Dallas.

Goff was the keynote speaker at yesterday’s second annual trends conference hosted by the North Texas Chapter of NAIOP, where the focus was the future and sure-to-come changes for commercial real estate. When it comes to change, Dallas could stand to take a lesson from Fort Worth, he said. Like many of his counterparts, Goff believes Dallas needs to get rid of its class C buildings, the ones pulling down occupancy levels to the point that they are affecting the Big D’s image and ability to compete with the rest of the nation.

Downtown Dallas, Goff emphasized, is “one of the most interesting real estate markets in the nation.” The bottom line is quality can be bought at a low cost, but the city needs to step in and help, he said, citing the need for more parking, more parks and more street retail. “It’s not what downtown Dallas is today. It’s what it can be,” he said.

The problems aren’t keeping Crescent from pulling out its checkbook to buy. The REIT has the utmost confidence in Dallas’ sustainability to weather the slow times which, Goff said, could last for another two to three years.

Sustainability during change was the underlying theme of yesterday’s NAIOP conference held at Cityplace. Juan Enriquez-Cabot, author and director of the Harvard Business School Life Sciences Project, got brokers thinking about the mysteries of genome tracking as second up, Ray C. Anderson, founder and chairman of Interface Inc. of Atlanta, took the 350 participants to the next level–empowerment over the future. “The economy is the wholly owned subsidiary of the environment,” Anderson said. “An industrial system that takes and takes and takes…simply cannot go on and on and on.”

A conference heavy on thought then delivered a panel of pros to discuss the Financial Accounting Standards Board changes and the impact on synthetic leases. “It would be a mistake to think these rules don’t affect you,” said Clint Shouse of Thompson & Knight LLP of Dallas.

The accounting guarantee deadline is Dec. 15 while the consolidation of special purchase entities change goes into effect March 15, 2003. The FASB has muddied the waters for off-balance-sheet disclosures because interpretations have yet to be issued. And even if they came out next week, there is not ample time to meet the deadlines, said Shouse.

The FASB “bombshell” is the accounting guarantee, according to Lloyd Cox of BNP Paribas Leasing Corp. Yes, there is standard language, but there is still confusion. It’s near impossible to calculate the required fair value of the embedded guarantee when “there’s no guidance for calculating fair value,” he explained.

The trio, like many in the industry, say the jury’s still out about the changes or whether or not anyone will walk away a winner. What is known is there has been no flood of sale/leasebacks as predicted. Another given, said Greg Greene of Ernst & Young’s real estate advisory services, is “the synthetic lease market is definitely going to shrink.”

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