Market welcomes new international investors.

International investors continue to provide many of the current financing opportunities in New York area real estate. We have seen foreign players come and go as their desire for high profile properties sometimes inflated values and resulted in less than desirable returns and shaky investments. The ripple-effect through the rest of the marketplace resulted in a deleterious affect on the entire economy.

The realism of the current decade has made room for a new type of international banker. The recent influx of Chinese investment has pointed towards a different way of thinking than we have seen from many other off-shore groups.

At a time when many are withdrawing from the market or sitting on their present real estate holdings, from the foreign perspective and research of market trends now is an excellent time to finance and accumulate U.S. real estate.

Some of the European banks and Japanese institutions that stepped away from the market because of their troubled loan portfolios, which some now attribute to the learning curve, are gradually stepping back in.

One of the newest players, Grand Pacific Finance Corp., an affiliate of Taiwan-based China Trust, has instituted a program to implement U.S. real estate investment and financing for their managed accounts. Their approach does not rely on leverage, which better equips them to handle changes in market variables.

As American correspondent for Grand Pacific, Al Berger & Co., Inc. will use three primary vehicles to accomplish their goals: origination of participating mortgages, the purchase of existing mortgages, and ownership of commercial and multi-family real estate.

The relative stability of the U.S. economy as compared to uncertain economies of the Pacific Rim nations is very attractive. The perception of a depressed market that has reached bottom, combined with opportunities made available due to a vacuum in financing, points towards improving returns in the future. From this point forward, there is a maximum estimated 10 to 15 percent downside in the market compared to a more positive probable outlook.

Although real estate investments in the Pacific Rim currently offer higher returns, it is believed that American holdings will provide greater long-term depth because of the stability of the U.S. Government as opposed to potential of changing administrations that could theoretically wipe out any investments in this region. Many nations in this area are also experiencing tremendous inflation rates that are negatively affecting their real returns.

By investing in American property, many international bankers are actually purchasing a haven of last resort where they may send their client families and themselves should shifting politics dictate an unfriendly environment at home.

New York is also likely to reap the benefits of a great deal of a considerable amount of Chinese capital, as many investors have chosen to stay within this metropolitan area because of a general working knowledge of the region. Consistent with the overall philosophy of many Chinese investors, there is considerably less emotional investment in real estate holdings. The desire is not to accumulate trophy properties or highly visible holdings, yet to find solid properties or lender equity positions that meet overall long-term goals, generally based on five-year plans. Going from the premise that a beautiful building is one that gives milk, an average multi-family dwelling in New Jersey is likely to prove more attractive than many flashier commercial properties with weaker bottom lines. Other attractive investments for off-shore investors are health-related facilities including nursing homes and medical office buildings. We have seen many buying sprees from many international groups. The current wave of Chinese investment and financing and renewed interest from European and Japanese institutions appears to offer greater depth and opportunity for long-term growth than we have seen in many years. Rational investment policies and available amounts of un-leveraged capital will not only offer greater sources of financing, but will bring greater stability to the New York metropolitan market.