Magazine article Journal of Property Management

Passport to Opportunity

Magazine article Journal of Property Management

Passport to Opportunity

Article excerpt

U.S. real estate firms test international waters

Multi-national clients are are driving the growth of United States-based real estate companies into international markets.

On the property management side, corporations operating facilities worldwide require professional management of those properties. On the investment side, many firms buying properties outside the United States need brokerage services.

Speaking at IREM's 19th Annual Asset Management Symposium in San Diego last March, Jim Greenfield, vice president of real estate services at Irving, TX-based Archon Group LP, said, "Global expansion is on the upswing in the real estate industry. Acquisitions and affiliations are accelerating similar to the growth period of the mid '90s."

Turning to Technology

Marvin Perlin, CPM, director of property/asset management at Signature Associates Inc.-ONCOR International, Southfield, MI, said the biggest challenge for real estate companies moving onto the international stage is having properly trained personnel. "You have to make sure your managers and staff are fully capable and trained to use leading edge technology," he explained.

"Moreover, the technology must provide ease of access by the user to the Web site. It should be available on a 24/7 basis and since there may be language or monetary differences, you must make it quite clear and explain what you're presenting."

Most international clients will want to access cash receipts or project management reports, he continued. "The Web site enables clients to access their accounts at their convenience and leave whatever questions they may have for our firm to answer on the Web site. Clients have the advantage of doing business without having to wait because of time differences."

Perlin said Web sites also provide the advantage of virtual tours and digital pictures that enable clients to visit properties and view them from the exterior and interior at their convenience. "We can be on the phone with them at the same time to answer questions while they're making the tour," he added.

Global Strategies

For a regional company to go global implies major expansion and extension of its services, Perlin continued. There are two ways to go about it, either via merger and acquisition or affiliation. His firm chose the latter route, affiliating with Washington, DC-based ONCOR International. ONCOR provides a package of property management and brokerage services in more than 200 markets in the United States, Canada, Europe, Asia, South Africa and Latin America. Over the past five years, ONCOR's 2,900 specialists have serviced more than $60 billion of commercial real estate requirements for worldwide clients.

ONCOR addresses the issue of client responsiveness by operating through a network of affiliates who work together to serve clients on a global basis. The alternate approach, merger or acquisition, may occur when a real estate firm wants to be in a particular market and finds a like-minded company with which it's compatible, Perlin said.

"Many large clients want singlepoint responsibility for their real estate requirements so they can concentrate on their core businesses," Perlin explained. "They want one reporting system and a single document that they can review every month. That allows the client to have local contact here nationally for properties located outside the United States or in other local markets."

Developing Global Alliances

According to Richard Needham, senior vice president of corporate facilities at Northbrook, IL-based Grubb & Ellis, a key dynamic in the global expansion of his firm has been its affiliation with Knight Frank. Grubb & Ellis has 90 offices, but together with Knight Frank there are 208 offices representing more than 8,000 employees working in 28 countries.

"We were seeking a partner with experience in providing real estate services in markets where we weren't active," he said. …

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