GlobeSt.com: Explain a bit about your mission and your clientele.

Howard: Our mission is to become the foremost real estate consulting firm globally. Our clientele is comprised of investment banks, CMBS participants, REITs, pension funds and other acquirers of real estate.

GlobeSt.com: How much of that is offshore?

Howard: We've focused a large part of our growth over the past five years on following our investment-bank clients as they have pursued, first, non-performing loan acquisitions and then originations in both Europe and Asia.

GlobeSt.com: And in the US?

Howard: Our business here is a little more mature. We've been in business since 1985 and evolved into a consulting firm in the early '90s. We matured our business as the CMBS business matured. Over the years, a lot of the borrowers who have used our investment-backed clients have started to use our services when they acquire real estate.

GlobeSt.com: Where at the top of the cycle, and maybe a bit beyond that. What are you seeing?

Howard: Domestically, most of our clients have gotten a little more conservative as leverage has gone up and cap rates have remained compressed, so we're seeing a trend toward a little more due diligence. In fact, our role is evolving back to where it was in the late '90s, and the assets and the underlying value of the properties are becoming more important.

GlobeSt.com: Which means more of an emphasis on due diligence?

Howard: For the past four or five years, our business has been largely about processing the loans. The market was so strong, the real estate questions had diminished. This year we're seeing our higher-leverage lender clients are much more concerned about the underlying security, what's going to happen in the next year or two in terms of tenant rollovers and things that might affect their ability to sell that loan.

But our clients are also seeking new business in other places where there wasn't an international market before. We have an office in London and we're working all over Western Europe as well as in India and the Emirates. We're about to open an office in Tokyo. We're following the investment banking community as it chases business that will be more profitable than it is currently in the US.

GlobeSt.com: What's driving the trend?

Howard: Yields are being forced down and that's why we're seeing the globalization of real estate. The major players all over the world on both the debt and equity side are buying real estate all over the world. That's not just US firms but European an Asian firms as well. And as you go offshore there is a similar trend. For example, the UK yield compression is even greater than it is in the US. The significant European players are pushing farther east, pioneering in Central Europe. We're working on transactions in the Czech Republic, Poland and Hungary now because there are better yields there.

GlobeSt.com: And going forward, if you were to compare your balance of offshore and domestic deals?

Howard: You'll see quite an important shift toward offshore. Probably 60% of our client base is involved in CMBS, securitizing mortgages. That business has become so efficient they're operating on relatively thin profit margins. The average deal now is between a point and two points. In Europe and Asia those same transactions can net anywhere between five and eight points. So in the CMBS world we'll continue to see increases in securitization outside the US.

GlobeSt.com: And outside of the CMBS world?

Howard: More American players are going offshore, but there are more worldwide players. The Aussies are buying all over Asia. The Japanese are making big investments into Chinese real estate. The top 15 players are coming from all over the world.

GlobeSt.com: Do you have any deep concerns for the US market?

Howard: The US market is very efficient. In the CMBS world, between the ratings agencies and the B-piece buyers there's a lot of heavy due diligence. We may have little hiccups, like maybe in Michigan--given the problems of Ford and GM and the increase in vacancies--but the country as a whole is stabilizing. If there's a risk in the capital markets it might be in some of the CDO transactions where people are shoving all kinds of pieces of loans into them and the appetite has been great. Over the next few years those will have to be carefully monitored.