That questions has become a focus for the American Real Estate Society, which has produced a monograph of essays on ethical issues on real estate. The monograph, which strangely enough has been funded by the Howard Hughes Corporation, attests to be a "breakthrough in advancing thought leadership on ethics in real estate."

The 15 essays cover five categories: policy issues, industry practice, environmental issues, ethical issues in the context of transactions, and tenants and ethics.

"While ethical considerations are a dominant theme in contemporary management literature, research and writing on ethics in real estate is still in the very early stages," said Stephen Roulac, distinguished professor of global property strategy at the University of Ulster. Roulac also serves as CEO of the Roulac Group, a strategy and financial economics consulting firm with offices in San Rafael, California and Hong Kong.

"In the early stages of this project, one highly placed executive responded to my solicitation for funding to support publication of this volume by saying, ‘I didn't know there were any ethics in real estate,’" Roulac added. "It is our intent to bring the issue of ethics to the forefront of the real estate discipline. Ultimately it is our hope that this volume stimulates researchers and practitioners alike to explore and discuss the ethics issues in their own spheres."

Check out the titles of some of these essays:

• Being Right -- In Speech, Action and Livelihood -- In Property Involvements,
• And Their Right Hand Is Full of Bribes
• War Is When They Kill Your Children: Ethics and Modern Property Development
• Ethics as Economically Influenced

Who knew real estate theory could be so sexy? Let’s hope the articles live up to their headlines.

"These papers are challenging, provocative, even disturbing to established practice," Roulac said. "No thoughtful professional can read these papers without being prompted to reexamine his or her own property involvements in the context of ethical considerations."

If any of you change your lives because of these papers, be sure and let me know.

Note: Copies of the monograph can be purchased through ARES ( http://www.aresnet.org/ ) or by calling the Roulac Group at 415-451-4300.

Speaking of ethics, Prison Realty Trust (NYSE: PZN) is again in the news. The company has received a $200 million equity investment from Pacific Life Insurance Company.

The investment came just days after the embattled company announced 1999 revenue of $285.7 million and a net loss of $62 million (54 cents per share).

Prison Realty develops and owns correctional and detention facilities. Headquartered in Nashville, Tenn., the company provides financing, design, construction and renovation of new and existing jails and prisons that it leases to both private and governmental managers. Prison Realty currently owns or is in the process of developing 50 correctional and detention facilities in 17 states, the District of Columbia and the United Kingdom.

In late December, Prison Realty fired top managers and dropped its real estate investment trust tax status.

The company is undergoing a total restructuring, as well as an equity shot of between $315 million and $350 million through the sale of new convertible preferred stocks and warrants to a group that includes interests from Fortress Investment Group, Blackstone Group and Bank of America.

Prison Realty Trust was a spin-off from Corrections Corporation of America in 1997. Prison Realty took the land, and CCA took the operating contracts in hopes of maximizing earnings through the REIT tax plan. Major investment houses were high on Prison Realty as recently as last May, when several firms had strong buy and buy recommendations on the stock.

The stock was up close to $4 on the news, impressive considering its recent all-time low of $2 1/8. But that’s nothing compared to a year ago, when shares traded for between $13 and $22.

Published: April 11, 2000

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Editor's Note: This article reflects the opinions of Lesley Hensell only and not necessarily the views of this or any other publication, organization or Website owner.