Marketplace Security Issues in the Age of Al Qaeda

Given the seriousness of security issues, the real estate industry has made a concerted effort to create awareness of homeland security issues such as emergency preparedness and response planning through the formation of REISAC, the Real Estate Information Sharing and Analysis Center. As Edward Glickman, president and CEO of PREIT noted, "The primary goal as a landlord is to take care of the tenant and provide a safe environment." When 9/11 occurred, Bellevue citizens flocked to Bellevue Square because they felt safe there. This was no coincidence - prior to 9/11, Kemper Freeman Jr. had consciously ensured that property security outnumbered the local police presence at any given time.

Today, more than ever, not taking the proper security precautions is seen as a major risk to the company and the brand. Not only that, but in these days of Sarbanes-Oxley, if you didn’t have the right insurance coverage on your building, you suddenly have a risk you should have been disclosing to investors.

There's a lot to do, and a lot of responsibilities to manage, especially with environmental and safety issues, increased security costs and compliance with existing and new legislation. Hawaii accidentally posted a list of 15 potential scenarios which had been disseminated by the U.S. Homeland Security Agency and was intended to be shared only with government organizations. Not only did this potentially create unnecessary anxiety, but it also revealed organizational details that didn't need to be shared.

When approached by companies about potentially cool applications like Google's Rideshare, marketplaces need to be vigilant about whether they are sharing information that may not be best placed in the public eye. While it is comforting to know that mall security has invested in global positioning software, it is probably not in your best interests to publish security vehicle information on a publicly accessible web site.

Information about a marketplace should be analyzed through a threat matrix. A threat matrix for each property provides property managers with a dashboard-like view of their property portfolio, and typically takes into account factors like asset location (is the property in an East Coast city like New York, or is it buried in the middle of the heartland), retailers (tenants such as the IRS or post offices have a different risk profile than Build-A-Bear), the neighborhood (doing an inventory of local offices, proximity to the Central Business District, transportation hubs), and traffic patterns (seasonality, chart of future events likely to cause a spike in traffic).

As Jim Rosenbluth, director of crisis management at Cushman & Wakefield put it, "Everybody knows you cannot identify every possible risk and assign a value to it, but you can go a long way toward minimizing the most-likely risk scenarios. You have to make a good-faith effort to identify the most significant risk factors and spend the money upfront to minimize your long-term exposure."

Link: REISAC slide presentation on real estate best practices