"It is difficult and expensive to expand internationally," said David Henry, vice chairman and chief investment officer at Kimco Realty Corp, "from currency to accounting to local culture." Because of those challenges, Kimco believes there is no substitute for having a local partner with experience. "It is almost an iron-clad rule that when we expand we do it with a local partner, preferably an institution."

Michael Pralle, president and CEO of GE Commercial Finance Real Estate, seconded Kimco's approach. "Real estate is perceived as a local market and we didn't know anything about real estate in other countries," he said. For this reason, his firm decided to start small and simple--with a local partner--when it ventured into the global pool. "Knowing what you don't know is very important," he added. <P.Carrying expansion success one step further from local partners, Jeffrey Schwartz, CEO of ProLogis, explained that firms also need to hire local employees. "You need expertise. Out of our 230 [employees] in Europe today, there are only two Americans," he said. Additionally, 45 of ProLogis' employees in China are Chinese nationals, he added.

However, hiring local employees in global markets also presents a challenge, according to Pralle. "The biggest challenge is on the people management side," he explained. "We recruit locally and, by definition, the team of people is relatively new to GE." Therefore, getting the employees acclimated to the company's culture and making them feel like part of the company is the single biggest challenge. Some of the other things, taxes and currency, they're [just] mechanics."