What is causing you to boost up yourpersonnel in Europe as of late?


Pralle: Actually we're boosting up staffing ingeneral. Europe is clearly one area, but we've hired people in theUS and Latin America, as well as Europe. This is consistent withour overall strategy of growing the business globally. Given thecurrent situation in the financial markets, the uncertainty and theturmoil, it's actually a great time to be building a business.

| Do you have a strategy in Europe thatmight be different than other parts of the world?


Pralle: All of the strategies in different partsof the world are different. Even within Europe they're different.You've got developed Europe, emerging Europe, Central Europe andthe investment strategies are quite different. The investmentpieces for developed Europe is opportunistic and distressed. Theinvestment pieces for Central Europe are more sound macroeconomicfundamentals, such as growing economies and middle classes thathave a sustained and long-term demand for real estate.

| Hence the bulking up in EasternEurope?


Pralle: Medium to long term, we think that EasternEuropean, or Central European as I refer to them, economies are notonly where investors want to invest capital but also have veryattractive prospects because of the underlying economic growth thatis two to three times what we are experiencing in Western Europe orthe US. The economies are pretty sound, and there is truly a lackof supply of high-quality real estate, whether you're talking aboutretail, residential or office.

| So you're looking across all propertytypes in that region?


Pralle: The most attractive property types ingeneral across Eastern Europe are probably retail and residential.That doesn't mean there won't be attractive office opportunities inSofia, Bulgaria; or an attractive industrial park in Belgrade.There are too many markets here that are too vast to make oneblanket statement. It's more complicated than that.

| How is that region like otheremerging economies you're investing in?


Pralle: Central Europe is more like Latin Americaand probably more different from Asia, particularly China andIndia. There is a pretty good transparent business system, a goodrule of law and Western-like institutions and regulations. Thosemarkets in Central Europe are better understood, as is the casewith Brazil and Mexico, than some of the emerging markets inAsia.

| Why have you waited to go intoAsia?


Pralle: We do have aspirations to have an Asianplatform, but we do not have an Asian platform to date because it'sa question of priorities. Our history of our business for manyyears has been in the US. We expanded into Europe a few years ago.We have a fund in Russia and are raising a fund in Latin America.It's a question of being able to do everything all at once. AddingAsia and the development of an Asia platform, which is a complexchallenge, would simply be having too much on the platesimultaneously. We're expanding in Latin America and there are hugeopportunities in the US with what's happening in the markets. It'sjust a question of doing things sequentially rather than doing toomuch at once. We are a 215-employee company with $9 billion ofassets under management. We're not a gigantic $90-billion,2,000-employee real estate firm. So we have to be sensible aboutwhat we roll out. But there's no question that long term, Asia isattractive, and we will have an Asian platform in the future.

| Is the global financial crisis makingdeveloping areas riskier than they were before?


Pralle: Traditionally, the emerging markets haddomestic sources of liquidity. In fact, some of them were netexporters of capital like China and Russia. And because they'regrowing, there's a lot of liquidity. But so much has happened inthe last 10 days. Up until then, most emerging markets wererelatively unaffected by the credit crisis in the US. How that'sgoing to play out with what's happening now is hard to assess. Wedon't know today how what's happening now in the US is going toplay out itself. On the one hand, there's a general flight tosafety. On the other hand, the investment thesis for many emergingmarkets is still valid. It's a completely different investmentthesis from Western Europe and the US today. In the US and WesternEurope, if you try to buy anything, you're buying at a deepdiscount because liquidity is so scarce. In markets like China,India, Brazil, Poland and Czechoslovakia, the investment thesis ismore about long-term growth and sound economic fundamentals.

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