The decision to expand to Europe evolved over the past couple years after reviewing the real estate market in California and the West Coast. The firm decided "the market (in California) was becoming more efficient and IRRs were decreasing."

Westcore maintains a strong statewide presence, with plans in 2006 to invest at least $250 million in California property, including $200 million in Northern California. However, the firm sought a market with additional opportunities and inefficiencies.

Brutten spent a year researching the European real estate market before launching the Lausanne office. "Our first plan was to go into Germany, but that market is still somewhat depressed," Brutten tells GlobeSt.com.

Westcore found a ripe market in Switzerland. The interest rates are historically low and stand in the 2.5% - 3% range. "It's a very stable environment, with a strong rule of law," Brutten says, from his Lausanne home base. "It's not too dissimilar from California from a supply/demand ratio."

But there have been cultural and language issues to deal with, so Brutten staffed up with local players, who among them, could speak the four predominant languages of the country: English, French, German and Italian. Added to the Switzerland office are local industry players Julien D'Amore as vice president of acquisitions and Michael Wolfson as vice president-due diligence.

With the language barrier broken down, among Brutten's biggest challenges is in dealing with a country that "is founded on the Swiss Bank secrecy laws," he says. "(In Switzerland), information is guarded, business is kind of clandestine." It is radically different to the US transparency model where databases are accessible and information is readily shared.

Local market knowledge comes into play as Westcore looks to develop its two distinct investment types. The firm spends half of its time looking at sale-leasebacks with corporate owners. The first three deals in the pipeline involve the Swiss divisions of US firms.

Brutten says the US connection is a coincidence as another half dozen deals involve Swiss-based companies. Another interesting dynamic in the country is that about 75% of the real estate is held by corporations, as opposed to investment entities.

Westcore spends the rest of its efforts on straight value-add deals involving shopping centers and office buildings. While in the US, real estate investors see "opportunities in half-empty buildings," Swiss investors are risk-averse. "Investors don't want to touch a property unless it's fully occupied," Brutten adds.

That philosophy opens the door for foreign dollars to flood in. "Half of the investors that we see at the bidding table are Swiss," says Brutten. "The other half are a combination of British, Irish and Israeli investors."