How Real Estate Developers & Lenders Can Better Reach The Foreign Investor

Look at any newspaper or television report and the top story is the continuous weakening of the U.S. dollar. While this may sound daunting, it can also be beneficial for anyone wishing to market to foreign investors. Many real estate developers and financial institutions have been capitalizing on this and reaping great rewards in doing so. Through effective integrated outreach plans, this continuing trend could provide developers and mortgage & lenders with even greater results.

According to the 16th annual survey of the Association of Foreign Investors in Real Estate (AFIRE) released in January, "New York and Washington DC were the top two global cities for foreign investors' real estate dollars." The weakening of the dollar has given many high net worth individuals and foreign institutions a much greater buying power. According to the survey, "these investors plan to place over 50% of their real estate dollars in the U.S." This is not the same market we saw in the late 80's where the majority of investors came from Japan and concentrated on highly visible purchases such as Rockefeller Center in '89. These investors are hailing from unlikely places such as Ireland, Spain, Italy, Hong Kong, India, Russia and Dubai.

However, as is quite common, many foreign investors invest only in cities they are familiar with. These tend to fall within the top tier markets like New York, Boston, Washington DC, San Francisco and Florida. According to Patrick Phillips, President & CEO of Economic Research Associates in Washington DC, "these foreign investors can also achieve great or perhaps an even higher return on investment by targeting 2nd and 3rd tier markets, such as Denver, Minneapolis, Orlando and Dallas." "Dallas is the 4th largest metro area in the U.S., the strongest in residential and commercial real estate, and is the fastest in job growth in the country." He went on to state that "quite often these markets are ignored by international and even national investors." So what can a developer or lender do to attract these investors?

An effective marketer can enact change and draw the attention of these high net-worth individuals and institutions, yet many do not know where to even begin. When dealing with these diverse markets cultural understanding is a given, but to effectively reach potential investors, strategic partnerships and fully integrated marketing campaigns are key. Lena Simpson, Senior Associate Broker for Corcoran Group in New York says, "first you must identify the in-country real estate partner that can educate you on the market and identify key investors." Global Advertising Strategies’ experience within the European, Russian and South Asian markets taught us that as important to finding the strategic real estate partner is a fully integrated marketing campaign, which quite often will allow the U.S. marketer to share cost through cooperative advertising in the market they are trying to reach. "It is not enough to simply take out an ad in the leading business publication, whether it be in Moscow or Dubai," stated Givi Topchishvili, President & CEO of Global Advertising Strategies. "Too often U.S. municipalities, developers and lending institutions do not create fully integrated marketing campaigns, which in the end - they walk away empty-handed instead of getting the easily attainable brass ring."

Stan Mankovsky, President & CEO of Stanley Capital Mortgage Company has in-depth experience working within the European and Russian markets and has successfully grown his business through effective marketing campaigns within multicultural communities. "When wishing to attract foreign investors it is important to coordinate in-country seminars that attract the high net-worth individuals and institutions. And, this is best achieved when working with your partner on the ground, and through effective marketing campaigns conducted by firms that understand the market you are in," stated Mankovsky.

Identifying the marketing channels within foreign countries can be daunting but U.S. developers and financial institutions do not have to be intimidated by this and should better capitalize on the opportunities the current market is presenting them with. As in marketing to the multicultural community in the U.S., it is our job as marketers to simplify the outreach process for them. The answer is NOT to place a billboard ad on the latest luxury tower in Manhattan or Dallas in Moscow or Dublin's city center! This does not connect you with the eyeballs you are intending to reach – it’s like throwing your marketing dollars away. These investors can be reached through appropriate interactive campaigns and other in-country media channels. Nevertheless, as with any effective marketing campaign whether it is Coca-Cola in Spain or Citibank in Moscow, the smart marketer partners with knowledgeable consultants that can simplify the process for you.

Here are some tips on how a new developer or financial institution can maximize the potential of investors in Moscow. The same methods are also applicable to other European or Asian cities and working with a marketing expert with in-depth knowledge of your target market can help you reach your target audience through an effective campaign via the appropriate media channels.

1. Rally local officials and business leaders already involved with your development and create a simple road show to highlight all of up-sides of your property, city, etc. (Note that in EU countries, you may actually qualify for a local subsidy to hold an investment seminar.)

2. Create a well targeted advertising and PR plan which focuses on niche publications that would target the mixed-use audience:

Developer investors.
Condo/Coop investors: Please note that Condo and Coop are not terms
your investor may be familiar with.
Hotel investors.
Here are some appropriate media examples:

websites

Iz Ruk V Ruki
RBC Nedvizhimost
Sobstvennik

print

RBC daily/RBC Magazine
Vedomosti
Vzgliad
Kommersant
Moskovskiy Komsomolets
television

Channel 1 Russia
Russia TV Channel
Stolitsa
NTV
Vesti
3. Find a partner on the ground in the U.S. and Moscow that understands both American and Russian cultural aspects, particularly best business practices as well as the appropriate lines of communication.

4. Take the show on the road – utilizing media and appropriate local organizations as hosts such as real estate and banking clubs, country/business clubs, up-scale malls or exclusive retailers, etc.