Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/536709
20 July | August | 2015 Commercial Investment Real Estate C CIM a E D U C ATI O N International by Design by Sara S. Patterson A huge uptick in profi ts among Chinese corporations is translating into more commercial real estate investment in the United States. For example, last year the Chinese insurance group Anbang purchased the Waldorf Astoria for $1.95 billion, the Chinese developer Greenland Group invested in new multifamily housing at Metropolis in Los Angeles and at Pacifi c Place in Brooklyn, N.Y, and the Chinese Wanda Group announced its fi rst major project in Chicago and a mixed-use development in Beverly Hills, Calif. In addition to China, f rms from Canada, Norway, Japan, and Germany are seeking hef y, safe returns on their U.S. commercial real estate investments. "Foreign investment in the U.S. is not a new phenomenon; we are just seeing an expan- sion," says Mark Levine, CCIM, JD, LLM (tax), author of International Real Estate and a professor at University of Denver. "T e num- ber of countries and the amount of investment are growing." Appreciating Capital T e United States is ranked No. 1 in oppor- tunities for capital appreciation, according to the Association of Foreign Investors in Real Estate. As a result, the CCIM Institute is taking measures to facilitate cross-border transactions that make it easier for its mem- bers to adopt a common shared language of real estate transactions. T at assists the already highly skilled CCIMs in cultivating relationships internationally. "Capitalists take advantage of new oppor- tunities," says Carmela Ma, CCIM, CIPS, RICS, president of CJM Associates, in Bev- erly Hills, Calif., and CCIM instructor. "It's in our best interest to encourage foreign investment in the U.S. because it helps keep interest rates low. Our commercial real estate is attractive because the United States pro- vides the most stable real estate opportuni- ties available. Historically, only 2 percent of U.S. real estate is owned by foreign nationals. AFIRE expects a 60 percent increase over the next f ve years." Ma sees three major hurdles for interna- tional investors in the U.S. CRE market dur- ing the next f ve years: availability of property; asset pricing; and competition from other investors. With intense competition for primary mar- ket properties, she believes multiple global investors are moving to secondary and ter- tiary markets, which is more good news for many CCIMs. Driving Growth T e stability in the U.S. government and fee simple ownership attract global investors. As the U.S. economy steadily grows, the U.S. dollar has surged ahead of other major cur- rencies except the Chinese yuan, according to CNN Money. During the past year, the dollar has increased in value by almost 10 percent compared to the British pound, 22 percent to the Japanese yen, and 21.8 percent to the euro. "I expect the U.S. economy to double dur- ing the next f ve years," says Adrian Arriaga, CCIM, president of AAA Real Estate and Investments in McAllen, Texas, and National Association of Realtors liaison to China. "T is is a great opportunity for CCIMs to cultivate relationships and work with foreign investors." For those who are not sure how to begin, Arriaga recommends visiting local chambers of commerce to determine which foreign nationals are entering their local markets. Cultivating contacts at local universities can help determine which countries international students are coming from, he adds. "Once you know which countries are investing in your community, you can f g- ure how to work with them," Arriaga says. In McAllen, he has cultivated relationships with South Koreans who speak Spanish as their second language and are acquiring proper- ties in the downtown area. With global investors moving into many secondary and smaller markets, CCIMs have an ideal opportunity to promote their skills and expand their businesses. Sara S. Patterson is senior editor of Commer- cial Investment Real Estate. alexis84/Thinkstock