FivePoint is a major developer. For smaller developers building smaller projects, forming a long-term strategy is difficult. Haddad says that these developers will be left to move with the flow of government regulations. “You are going to find people like us forming banks for people to use to mitigate issues,” he says. “In terms of the other technologies, smaller companies are only going to be able to go with the flow of regulations. It is going to be a case-by-case and it is going to depend on what technologies we are talking about.”

Technology is rapidly changing, and it will shape future developments. This can be a precarious situation for developers breaking ground today and delivering into a market several years in the future. While one solution is to encourage government regulations that will allow developers to adopt new technologies into development projects, another is for developers to adopt multi-decade strategies and development projects. Emile Haddad, the new chairman of the USC Lusk Center and CEO of development firm FivePoint, recommends developers look out over 10-, 15- and 30-years.

“Our company is different than most companies,” Haddad tells GlobeSt.com. “We have a strategy that has an outlook of three decades. The assets that we are working on today, we started on them 20 years ago—and those are assets that we'll deliver in the next 10 to 20 years. Because we are looking over the long term, we rely more on demographic shifts and technology that is going to change the way people behave. We look at more long-term trends to be informed. The lifespan of a typical developer is two to five years; ours is 20 to 40 years.”

The risk of a long-term strategy like the one the FivePoint has adopted is that you are more susceptible to economic changes. FivePoint keeps a strong balance sheet to ensure it doesn't get caught in a down cycle. “The way we cover ourselves in terms of not being caught in a cycle is simple: we make sure our balance sheet is solid. We are the largest developer in the state, and we have zero debt,” Haddad says. “We are always making sure that if the market shifts and we cannot generate revenue that we are not going to be in trouble.”

In addition to keeping a solid balance sheet, Haddad also adapts his development projects during the development process to deliver a relevant product to the market. “Because of the nature of our assets, we have the ability to, in real time, adjust the product to what the market demands,” adds Haddad. “Typically, when a developer buys land, it is already cast in stone in terms of what the product is and what the use is. If that ends up not being in demand, then you are stuck with it. We have the flexibility to residential to commercial, large home sites to small home sites, retail to food and beverage. That is how we adjust to the market demands. When the market dries up totally, our balance sheet protects us. It is a multi-decade strategy.”

FivePoint is a major developer. For smaller developers building smaller projects, forming a long-term strategy is difficult. Haddad says that these developers will be left to move with the flow of government regulations. “You are going to find people like us forming banks for people to use to mitigate issues,” he says. “In terms of the other technologies, smaller companies are only going to be able to go with the flow of regulations. It is going to be a case-by-case and it is going to depend on what technologies we are talking about.”