International Perspectives

Fostering Global Business Relationships

Megan Eu, CCIM, has strong business relationships with the Chinese and Japanese markets. She’s Vice President of Boutique Brokerage Great Earth Realty in Bellevue, Wash. The company is owned by her father, Larry Eu, CCIM. Her mother Lien Ma, CCIM, CRRP, is also actively involved. The company is fluent in English, Chinese, Mandarin, Vietnamese, Cantonese, and Taiwanese. Great Earth has built up a strong clientele of international, national, and regional brands.

The majority of what Eu focuses on is retail and restaurant sales/leasing. A significant part of her business is clients bringing their international restaurant or retail business to the U.S. 

“In recent years, I've seen an influx of business owners from China,” Eu says. “They moved to the U.S. and want to start a restaurant or retail business here. Many owned a business or family restaurant in China.”

Eu recognizes cultural differences in doing business with Chinese clients. 

“Many times, they will negotiate things but not really so much on paper,” Eu explains. “They make the connection first, and then you talk about business, so it’s understanding some of the cultural implications.”

Eu is fluent in Mandarin Chinese and Japanese and is also working with CCIMs in Japan to drive more U.S. investments into Japan. 

“Japan is a very good state for investment now because of the low currency rate,” she explains. “Interest rates are really low, and the regulations for foreign investment are not very strict compared to the U.S.”

Eu’s family is very involved internationally. Larry Eu is Past Chair of The CCIM Institute International Activities Committee and has international relationships including being a business partner with several Taiwan members of The CCIM Institute.

“It’s that connection between referrals and working not only with Taiwan and Japan, but also South Korea,” Eu notes. “And even though China doesn't have a CCIM chapter, they have CCIMs, and we connected with a few when they were in Seattle last fall.”

The CCIM International Activities Committee hosted CCIMs from Japan, Korea, Taiwan, Canada, and China at The CCIM Institute’s Annual Governance Meetings in Seattle in 2023.

What Eu loves most about her work are the “cultural aspects of being able to meet different people and help them with their real estate needs, especially small businesses,” she notes. “It’s helping them essentially make their dream come true of what they want their store or restaurant to be.”

International Connections Run Deep

The real estate sector in Asia is experiencing diverse demands across different countries, presenting opportunities for U.S. and Asian collaboration. “In Taiwan, the primary demand is for flex space and industrial warehouses,” states Carole Tam, CCIM, Broker/Owner of TAC Brokerage and Consulting, LLC in Richardson, TX. Taiwan faces a shortage of industrial warehouses, pushing prices high. 

Japan's urbanization trends and aging population have led to a need for single-family residences (SFRs) and modern office spaces, as well as industrial warehouses for logistics and e-commerce. “For investors who do not have more than $ 500,000 to invest in commercial real estate, they chose to invest in the single-family residence,” says Tam. 

“WELCOME TO TEXAS” BUS TOUR

Tam will be sponsoring the first "Welcome to Texas" bus tour during The CCIM Institute's 2024 Annual Governance Meetings to build a strong connection between international brokers/investors and Texas and bring business to the state. “It’s very important to build relationships and invite people in person,” she notes. “We’re excited to host this "Best of Texas" tour so we can share the beauty of Texas. The majority of business owners we spoke to have never been to Texas and this is a wonderful way of showcasing the opportunities in the state.”

Foreign Investors Help Fuel Canadian Investment Activity

Raman Bayanzadeh, CCIM, has his finger on the pulse on foreign investment in Canada. He’s Principal at Royal LePage Sussex in West Vancouver, British Columbia. His areas of expertise include commercial, industrial, development, leasing, hotels, investment, and office. This year, he’s The CCIM Institute’s Regional Vice President – Region 12 – Canada. He’s in constant contact with both Canadian CCIM chapters and served as President of CCIM Western Canada in 2020.

“There’s a huge amount of foreign investment in Canada, either direct or indirect,” Bayanzadeh notes, adding that a significant portion is in Metro Vancouver.

In fact, nearly 50 percent of all commercial real estate investments in Vancouver last year were driven by foreign investment. 

“For a lot of buyers here, at some point, their source of money is partially coming from somewhere else,” he explains. “A lot of money in Vancouver is from Asia, Iran, and India. They have strong communities here, so a lot of the purchases are through those monies.”

One of the largest transactions in 2023 was Germany’s Deka Group acquisition of two downtown Vancouver office towers for $223 million. 

Toronto also experienced strong activity when Fort Worth, Texas-based TPG acquired a 75 percent interest in two Toronto-area industrial parks through a deal that values the portfolio at $970.5 million.

Ethnic diversity is integral in Canada’s foreign investment activity, particularly in Vancouver and Toronto.

Under its Immigration Plan, Canada is looking to welcome 500,000 new immigrants annually in the coming years – the highest levels in its history. As the population grows, so does demand for housing and commercial real estate.

“Canada is extremely diverse, and there are a lot of new immigrants, so even if it's not direct foreign investment, it’s indirect,” Bayanzadeh explains. “It’s people who became immigrants in the last five, 10 or 15 years but still a source of their money is coming from Iran, China, India, and the U.S.”

Of course, challenges exist in Canada’s capital markets – like all global markets.

“We’re experiencing a decline,” Bayanzadeh notes. “Last year was actually one of our worst years, but that's something that was global.” He points to high interest rates and inflationary pressures.

And yet, Canada still outperformed. While global capital markets experienced a 47 percent decrease in investment activity in 2023, Canada only saw a 15 percent decline.

According to one CBRE executive, “the crazier the world gets, the better Canadian commercial real estate looks to investors.” Perhaps, it’s due to its history of attractive risk-adjusted returns and strong economic fundamentals.

“Whenever we see other places in the world see some instability, we see money flow to Canada,” says Bayanzadeh. “Whether it's Eastern Europe, China, Iran or the Middle East, you name it.”

Education is the Cornerstone of Successful Business Practices

With nearly four decades of experience, Walter L.K. Lui, CCIM, is well-versed in foreign investment activity in the Canadian real estate markets. In fact, as Broker of Record at Nu Stream Realty (Toronto) Inc. Brokerage, he’s training his brokers specifically on the ins and outs of foreign investment.

Holding training sessions twice a month, 20 to 25 brokers are attending each session – proof of the robust interest and high volume of foreign investment in Canada.

Lui provides case studies of real situations with current listings. Several of his brokers have Asian backgrounds and are working with foreign investors, especially from their home countries, where they may have connections and relationships.

“But they may not all have the experience,” Lui notes.

Lui educates his brokers, so they can educate their clients. “We need to make sure that clients understand our rules and regulations, because a lot of them come from different countries, and they’re used to their own laws and bylaws,” he explains. “When they come to Canada, they have to understand our local laws and bylaws and have to comply.”

The brokers can educate international clients on the rules of investment in Canada because they have different returns and cap rates in their own countries.

Lui’s educational efforts are aiding in transactions. One of his agents has a client who originated from China that purchased an office building in Scarborough, a district of Toronto, Ontario, for eighteen million Canadian dollars. The deal is in the due diligence period. The challenge was the building is nearly 20 percent vacant, and previous potential buyers had trouble obtaining financing because the vacancy is so high.

“However, my agent’s client is a user that will take one full floor for their own business, so that occupies the remaining vacancy. That’s why the seller accepted their offer, and they cut a good deal,” says Lui.

As the world becomes increasingly interconnected, the expertise and network of CCIM professionals serve as invaluable assets in navigating the complexities of international real estate transactions. With their dedication to building bridges across borders, CCIMs contribute not only to the success of individual transactions but also to the growth and resilience of the global real estate market as a whole. ■