International: Cashing In on Asian Crisis
SPECIALTIES IN BRIEF: Appraisal, Commercial, International, and Property Management. The latest news on your real estate niche.
April 1, 1998
More and more U.S. investors are shopping for foreign and domestic commercial real estate bargains as a result of Asia's recent volatile stock markets and economic meltdown. The Asian crisis, though stinging to many of America's high-tech industries, comes at a good time for real estate investors, say investment bankers specializing in Asian investment.
Real estate investment trusts and other buyers are keeping a close watch on commercial property prices in Asian markets. Japanese opportunities, in particular, are whetting the appetites of U.S. investors, since investment bankers have years of experience working in Japan, says Mike Evans, national director of E&Y Kenneth Leventhal. Overbuilding and cheap commercial property make Thailand another area attracting attention, reports Randall Lee, president of Lilly Enterprises Inc., a Los Angeles investment company experienced at securing Asian money to the United States.
Closer to home, U.S. buyers also have an eye on cash-seeking Asian investors who purchased U.S. properties when the market was on an upswing in the mid-1990s.
“In the fall of 1997 we negotiated an agreement with Asian partners to sell our condo products in New York City to Asian investors and then manage and lease out the properties for them,” reports David M. Michonski,CIPS, 1998 vice chair of NAR’s International Operations Committee. Michonski is also chairman and CEO of RealShare International, the holding company for Coldwell Banker residential and commercial franchises in New York City. “Now we can’t even get a return phone call from the Asians. They're temporarily out of the market and scurrying to hold on to what assets they have.”
Michonski says his company sees the opportunity to cultivate relationships now that will pay off later. “My guess is that over time the Asian economies, because they’re based on such solid fundamentals as high savings and hard work, will rebound even stronger than before, and we’ll see a new flood of money coming this way.”
Appraisal: New Standards—When?
Revisions to the Uniform Standards of Professional Appraisal Practice may take a while to be fully implemented. “Once all is said and done in terms of exposure drafts of the standards, it could take until the end of this year to get USPAP into final form,” says Norman J. Goldberg, NAR’s representative on The Appraisal Foundation's board of trustees. “All of 1999, then, would most likely be dedicated to implementation of the new standards into state laws. In the end, the revised USPAP may not go into effect until the year 2000.”
The current draft addresses the standards that apply to appraisers in developing valuation, appraisal consulting, and appraisal review assignment opinions and conclusions.
To access the new standards, visit www.appraisalfoundation.org.
Commercial: Top Cities for Apartment Investment
If you're looking for a good apartment investment, turn to coastal urban areas. A recent report by E&Y Kenneth Leventhal Real Estate Group and the CB Commercial National Real Estate Index says nine of the top 10 markets are in coastal cities with high job growth. The report selected, from 70 U.S. markets, those with the fastest rent and price appreciation in 1997 and with projected favorable conditions for the next 12 months.
The top markets are, in order, San Francisco; Orange County, Calif.; Boston; San Jose, Calif.; New York-Long Island; San Diego; Oakland, Calif.; Seattle; Los Angeles; and Minneapolis-St. Paul.
According to Steve Friedman, national director of housing for EYKL, good job growth in those areas, in addition to a low unemployment rate, creates apartment demand not only because of the lack of single-family housing but also because of barriers in the way of new apartment construction. Such obstacles range from local building restrictions to a lack of land.
Property Management: 10 Factors Tenants Look For
The U.S. General Services Administration has identified 10 items that tenants place the greatest importance on when deciding whether they’re satisfied with a particular property or service provider.
According to a recent survey of more than 100,000 tenants of government-owned and government-leased buildings, the top 10 factors are ease of doing business; effectiveness of communications; understanding of tenant needs by building management staff; management's ability to accommodate unique tenant needs; flexibility of procedures for obtaining services; communications follow-up; timeliness of responses by building management staff; availability of building management staff; reliability of building management staff; and quality of maintenance work.
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