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Panel: Local Employees Are Key to Global Expansion

NEW YORK CITY-Industry executives agree teaming with a local partner and hiring local employees in overseas markets is one of the most important steps a real estate firm can take when venturing onto the international scene.

By Melissa Kress | Updated on March 18, 2005

NEW YORK CITY-No matter what property type or aspect of the market–from retail to industrial and development to finance–industry executives agree an important first step in expanding globally is finding the right people to do it with. That was just one point made during the New York University Real Estate Institute 10th Annual Symposium.

“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.

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