Panel: Local Employees Are Key to Global Expansion

"It is difficult and expensive to expand internationally," said David Henry, vice chairman and chief investment officer at Kimco Realty Corp, "from currency to accounting to local culture." Because of those challenges, Kimco believes there is no substitute for having a local partner with experience. "It is almost an iron-clad rule that when we expand we do it with a local partner, preferably an institution."

Michael Pralle, president and CEO of GE Commercial Finance Real Estate, seconded Kimco's approach. "Real estate is perceived as a local market and we didn't know anything about real estate in other countries," he said. For this reason, his firm decided to start small and simple--with a local partner--when it ventured into the global pool. "Knowing what you don't know is very important," he added.

However, hiring local employees in global markets also presents a challenge, according to Pralle. "The biggest challenge is on the people management side," he explained. "We recruit locally and, by definition, the team of people is relatively new to GE." Therefore, getting the employees acclimated to the company's culture and making them feel like part of the company is the single biggest challenge. Some of the other things, taxes and currency, they're [just] mechanics."

Schwartz agreed hiring local people can be a challenge, but by having local experience and empowering them with decisions pays off, he said. "By employing the best people you have the ability to hedge your risks."