Property pursuit.

With manufacturing moving to developing economies and world commerce sending everything from computer chips to miniskirts scuttling across the globe, one thing is clear: Companies need places to park their stuff. In fact, they need bigger, better and more technologically equipped places, notes Hamid Moghadam, chairman and CEO of AMB Property.

Over the past 24 years, that need has fueled the growth of AMB, a company that Moghadam and two partners (Douglas D. Abbey and T. Robert Burke) launched in 1983 with a $50,000 loan and offices in a garage. By 1997, the company had just under $4 billion in assets--enough, decided the partners, to take it public. Thus, AMB became a publicly traded operating company structured as a REIT. The company used the funds from its IPO to shore up its holdings, adding properties in strategic markets near major international cargo airports and seaports.

"Today, we're approaching $15 billion in assets in 13 countries," says Moghadam, who notes that a global footprint and the ability to access capital at an attractive cost are considerable differentiators in industrial real estate. "All of a sudden you can take your discussion with tenants from a deal-by-deal discussion to a strategic one where you're not just talking about holding them to the last dollar of a lease, but about providing them space where they need it when they need it."

AMB owns and operates facilities in Atlanta, Dallas, Los Angeles, San Francisco, Seattle and other major U.S. transportation centers, as well as international holdings in Brussels, Frankfurt, Hamburg, Milan, Paris, Shanghai and Tokyo. Its customers, which range from consumer products companies like P & G and Colgate to carriers like DHL and Federal Express, lease space in AMB's existing facilities or contract with the company on build-to-suit projects.

So far, AMB has managed to skirt the biggest risk of a large real estate developer--empty space. Its properties average more than 95 percent occupancy, and defaults on leases are just 0.05 percent--a figure Moghadam attributes to the desirability of its locations. In fact, AMB actually benefited from the spectacular collapse of one client--the online grocery business Webvan. "We built three warehouses for them and they went broke on us," says Moghadam. "But we had everything re-leased at higher rents within six months, so we actually made even more than we would have."

Can AMB continue this pace of growth? Moghadam is optimistic, pointing to economic trends and to its burgeoning relationships with the growing number of global companies with a need to efficiently move goods through airports, harbors and other transportation centers. Once clients experience the solutions and service level a company like AMB provides in one market, chances are good that they'll come back to the fold when they have needs in another location, he asserts. "If you're a consumer products company and you want a building in Dallas, there's plenty of land and plenty of people who can build that for you," explains Moghadam. "But if you want it in Mexico City, there are maybe two people who can do it for you. So when you solve a difficult problem for someone in a Mexico City or a Shanghai, they're more likely to call you next time a requirement comes up--even if it's in an easy place like Dallas."

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What's more, distribution systems are evolving in a way that will ultimately fuel demand for the sorts of locations AMB has been accumulating. As technology enables more efficient inventory tracking and replenishment, the emphasis is shifting from scores of regional distribution centers to a handful of strategic locations. "Instead of having 30 warehouses in the states, companies will have four locations--in New Jersey, Dallas, Chicago and Los Angeles," says Moghadam. "Instead of having one in every country in Europe, they'll put three in Western Europe. Global trade is growing at between 8 and 10 percent per year and right now we and our largest competitor only control 8 percent of the total market. That leaves a lot of room for growth."

At 51, Moghadam is committed to steering that growth for AMB--and to tying his own financial future with that of his company. In fact, he consistently resists financial advisers who urge him to diversify his holdings. "I've never sold a share of stock in the company, and I've owned some of it for 24 years," he says, estimating his holdings at about 3.5 million shares, or 50 percent of his net worth. "I tell them, 'I understand the theory of diversification, but this is about principles. As long as you're the CEO of a company, you have to eat your own cooking.'"