"Real estate is still a local industry," stressed Jack Foster,managing director and head of global real estate, at FranklinTempleton Investments. Since real estate is priced locally anddriven by local economies, it is the duty of investors to find thebest values around the world, he said.

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However, there are some challenges, especially in countries thatmight not have the level of transparency enjoyed in the US, pointedout James Rehlaender, managing director of European Investors Inc."The companies themselves don't offer up much information," he saidbut acknowledged that "the last three years is 10 times better thanit was five years ago."

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And though they are attractive because the returns can come inhigher, emerging markets can be even tougher, said Nancy Holland,chief investment officer of global securities for FortisInvestments. "There's not a lot of research out there on any ofthese countries," she said. "You have to have people out there whounderstand these markets."

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But these challenges aren't stopping investors from delving intointernational markets. For his part, Jeffrey Horowitz, global headof real estate investment banking at Merrill Lynch, said his firmwill likely garner two thirds to three fourths of its revenue fromforeign entities in the next few years.

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