Boost Members’ Business by Attracting Global Investment

11 REALTOR® associations partner with NAR at MIPIM’s USA Pavilion.

By Jean Maday

As part of an initiative to raise the profile of the U.S. as a real estate investment opportunity and to promote the expertise of REALTORS®, NAR partnered with 11 local and state REALTOR® associations this past spring in the NAR-USA Pavilion at MIPIM in Cannes, France. The world’s largest international commercial property event, the convention draws more than 24,000 attendees from 90 countries, including 5,000 investors.

The NAR-USA Pavilion features market-centric kiosks for associations to showcase their area and local development projects. For returning partner Missouri REALTORS®, CEO John Sebree, RCE, sees a solid strategic reason to be at MIPIM: “We are within 600 miles of 52 percent of all U.S. manufacturing plants. We capitalized on this in meetings with international investors. We made a conscious decision to promote our state for economic development knowing that the international buyers will follow. We had a very positive experience at MIPIM—it is a great investment.”

In the past three years, the number of NAR partners at MIPIM has grown from three to 13, with that number expected to increase. NAR’s exhibiting REALTOR® association partners in 2017 included Miami, Illinois, Missouri, Nevada with the Las Vegas and Reno local associations, Arizona with the local Scottsdale association, and the Beverly Hills/Greater Los Angeles Association of REALTORS®. NAR’s official pavilion sponsors were Florida REALTORS®, the Institute of Real Estate Management, the Washington State Association of REALTORS®, and the Rhode Island Association of REALTORS®.

First-time exhibiting partner Rhode Island Association of REALTORS® had a tremendous experience, says CEO Phil Tedesco, RCE, CAE. “As a first-time attendee, I was blown away by the scope and the depth of this conference. Our presence at MIPIM has already presented additional opportunities to promote the state of Rhode Island. The opportunity is not about the association, but about the association’s role as an economic driver and leader within the state. Our leadership has made the connection and clearly sees the value.”

The Miami Association of REALTORS® has long seen the value in international events. CEO Teresa King Kinney, RCE, CAE, says MIPIM helps her association build momentum and achieve unparalleled global presence and visibility. “As the top market for international buyers and investors in the U.S., Miami benefits from our participation at MIPIM and other international exhibitions and events by establishing new relationships, connecting with new partner organizations, and promoting the U.S. and Miami to new worldwide audiences.”

In addition to representing investment opportunities in their areas, local associations bring along members eager to make international connections. Chip Ahlswede, RCE, CEO of the Beverly Hills/Greater Los Angeles Area Association of REALTORS®, says, “MIPIM provides opportunities for REALTORS® to interact with international investors, clients, and professionals in order to create the global connections and awareness necessary to compete in their local real estate marketplace.” As an additional benefit to members, NAR negotiates a substantial discount on the event registration fee, saving members hundreds of dollars.

Illinois REALTORS® 2017 President Doug Carpenter believes MIPIM not only builds business for REALTORS® but also educates the international community on what a REALTOR® stands for. “The event allows us to make sure foreign real estate investors understand the value of doing business with a REALTOR®. The show has traditionally been geared toward European investors, and many of them may not be familiar with the REALTOR® brand and the expertise and professionalism that come with it.”

Foreign investors flowed nearly $200 billion into U.S. commercial and residential real estate last year, according to research from both NAR and Real Capital Analytics, because the U.S. is known for market stability and long-term financial growth. Grab your share of international investment by attending MIPIM 2018.

To learn more about NAR’s MIPIM initiative, visit nar.realtor/MIPIM. To learn about the benefits of being a partner in the NAR-USA Pavilion, contact Jan Hope, VP of commercial and global services, at jhope@realtors.org or Jean Maday, director of commercial development and services, at jmaday@realtors.org.

Foreign investors now target smaller markets

One-fifth of surveyed REALTORS® practicing in commercial real estate closed a sale with an international client in 2016, and as foreign investors flock to smaller-sized commercial properties in secondary and tertiary markets, many REALTORS® are confident that increased sales and leasing activity will occur in 2017. 

This is according to the new 2017 Commercial Real Estate International Business Trends survey NAR released in June, which analyzed cross-border commercial real estate transactions made by REALTORS® in 2016. Most REALTORS® who specialize in commercial real estate reside in smaller commercial markets where the typical deal is less than $2.5 million.

Lawrence Yun, NAR chief economist, says the appetite for U.S. commercial real estate property was strong from foreigners last year and shows little signs of slowing in 2017.

“Multiple years of steady job growth and the strengthening U.S. economy—albeit at a modest pace—makes commercial property a safe bet for global investors looking to diversify their portfolios and generate returns outside their country of origin,” he said. “While Class A asset prices in many large markets have surpassed precrisis levels, REALTORS® in many middle-tier and smaller markets stand to benefit from the increased interest from foreign and domestic commercial property investors.”

Added Yun, “Forty percent of REALTORS® expect an increase in foreign buying clients this year. The healthy labor markets and lower property prices in smaller markets are poised to make up a larger share of activity.”  

Of the 69 percent of REALTORS® who indicated they completed a commercial real estate transaction last year, 20 percent reported closing a deal for an international client. Additionally, 22 percent of REALTORS® said they completed a lease agreement on behalf of a foreign client. 

The top countries of origin for buyers were China (17 percent), Mexico (14 percent) and the United Kingdom and Venezuela (both at 7 percent), while sellers were typically from China (17 percent) or Brazil, Canada, France, and Mexico (all at 10 percent). 

The survey also found that foreign buyers of commercial property typically bring more cash to the table than those purchasing residential real estate. Sixty percent of international transactions were closed with cash, while NAR’s 2016 residential survey found that exactly half of buyers paid in cash. 

NAR’s 2017 Profile of International Activity in U.S. Residential Real Estate is scheduled for release this summer.

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