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NEW YORK CITY-Under the shadow of Westside construction cranes, the Cityscape USA conference unleashed its second day on the Javits Center here in the Big Apple. The keynote presentation titled “US Investors Abroad: Emerging Markets–Friend or Foe?” brought a mixed panel of industry elite to comment on the trends, factors and dangers of foreign investing.

The panel was moderated by Dennis Yeskey, national director of real estate capital markets, for Deloitte. The rest of the panel consisted of David Roth, managing director at Blackstone Real Estate Advisors; Donald Trump Jr., EVP of development & acquisitions at the Trump Organization; Robert White Jr., founder & president of Real Capital Analytics; Dr. Jane Murray, head of Asia Pacific Research and international director at Jones Lang LaSalle; and Charles Andrews of Blue Coast.

The panel focused on where the opportunity lay for US investors seeking to expand globally. White said, there were not a lot of funds that were willing to go global yet, and that the typical foreign investment came from “entrepreneurial capital, opportunistic and private investment”. Roth added that there was a “large amount of investment activity” in China, Brazil and Dubai characterizing his attitude toward foreign markets judiciously as “long term–bullish, short term–cautious.”

When the question was posed to list the top investment opportunities in foreign markets, White’s answer was the most ubiquitous among the panel, “China, China, China.” A lot of “investors got burnt in Russia,” White offered as a reason for China’s popularity. Murray, the resident expert on Asia Pacific, buttressed the argument explaining the area’s rapid growth.

“The growth rates are staggering,” she pointed out. When Japan–with a more mature economy–is removed from the equation, Murray continues, there is a 7% rate of growth. “China and India have one third of the world population,” she expanded. “[They both have] “high urbanization rates and strong movement to cities.” Her recommendation for US investors is to increase their allocations to this area.

She did have a few caveats for China, which has seen a lot of “overheating”, in her terms, of its real estate market, as of late. The central government put “restrictive measures”, she explains, to cool the market down, some of which are monetarily prohibitive, such as forbidding foreign borrowers to be involved in a deal. She remarked, “[China] is not an easy place to do deals at this time.” There are still deals getting done, she explains out, but you have to look more toward development in second tier cities. Roth, whose firm is currently involved in a few deals–which he pointed out are not closed yet–backed Murray, explaining that there are structuring issues causing problems “getting money in and getting money out.”

In lieu of China, the other BRICs–Brazil, Russia and India–present issues of their own for investment. While the panel acknowledged the opportunity in Brazil, the focus turned to Russia and the mass of wealth it has accumulated over the last 10 to 15 years, since the fall of the USSR. Trump said that Russia has “more national strength” and focuses mostly on Moscow, as opposed to St. Petersburg, but the most important thing seemed to be brand.

Roth interjected his concurrence, “Brand is very important in these emerging markets,” citing Blackstone’s recent acquisition of the Hilton brand–which just debuted in Moscow. But Trump is wary of deals in the former Soviet Republic, calling it a “scary place” and “the wild west”, compared to a more logical deal-making structure like India. “[It's] not an issue of finding a deal,” Trump explains. “Can I get my money back? Can I trust the person I’m doing this deal with?” The lack of transparency and the uncertainty of their markets had spoiled a few of his company’s possible deals, he warned.

The panel was split when it came to Dubai, some finding opportunity, others issuing caution. Andrews, advocated for investing in Dubai, saying that he feels many Americans have not taken advantage of Dubai simply out of “ignorance and fear”. There are “variables that don’t affect the west”, Andrews continues, citing the supply and demand factors of the other middle eastern countries. Roth disagreed with the characterization of American investors being ignorant on Dubai, saying that “a lot of the deals, don’t make sense” and scare away more conservative investors or funds, questioning some developments’ fundamentals.

Regardless of opinion, Dubai is expanding its real estate market exponentially and concerns were voiced as to a potential burst in its bubble, a la the current US mortgage crisis. Trump saw promise, reminding that Dubai is a “safe haven for the Middle East,” which changes supply and demand factors, but pointed out, “Every market is cyclical.”

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