William Allen describes the forces struggling for dominance in the real estate industry today.

Photographed by Michele A. H. Smith

"It is like the immovable object meeting the irresistible force." This is how William Allen, Principal in the real estate arm of the Carlyle Group, describes the real estate industry today. "One force is pushing real estate companies to stay small," he explains. "The other is encouraging companies to grow. I don't know what is going to happen, but it is going to be interesting to watch."

"On one hand," Allen says, "real estate is a localized business characterized by heterogeneous assets, lack of information and inefficient markets. And it is cyclical too. All of these factors account for the fact that real estate historically has been a highly fragmented business that has supported many, small entrepreneurial companies."

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