Corporate Real Estate Saga... Tuesday's Dispatch, Did Real Estate Take Down Enron? (Mar 29) generated interesting personal connections to the story of the rise and fall of Enron, once ranked #7 on the Fortune 500.

John Scoblick with CRESA Partners in Houston sent me a fascinating article, Real Estate from an Enronian Perspective, about his nine-year, Zelig-like experience at Enron (Sep 2003, REDNews.com).

As Scoblick writes, the Enron Property Company "was required to be a 'for profit' operating group and our continued existence was dependent on profitability. We were responsible for generating a profit on a fully loaded cost basis including an allocation of rent, salaries, benefits and other expenses."

Although Enron did not mandate that its operating groups use Enron Property exclusively, it did handle "a substantial part" of Enron's business. So it's not surprising, given Enron's explosive growth, that revenue from commissions produced profits "year after year."

Scoblick's tenure at Enron eventually took him to Enron Energy and Enron Broadband, where he resigned as Director of Real Estate in August 2000, after nine years at Enron handling a wide variety of real estate issues.

Shortly after leaving, he was approached "by a group within Enron for my opinion, reaction and consultation regarding a new real estate risk management product under evaluation. ... that would allow both building owners and tenants to protect against future market rental rate fluctuations."

Now put your hand on your wallet. Another (confidential) respondent sent me an Enron PowerPoint presentation, "Products for Commercial Real Estate," which appears to be a version of this proposed product.

You've never seen so many boxes and arrows, all tied together with financial mumbo jumbo. "This product will allow for protection against rising and falling lease rates ... will be separate from the physical space of the building owner or tenant ... [and] can be fee-based or non-fee based." I'll bet it was hard for Scoblick to sit through this presentation with a straight face.

--Peter Pike