The world is getting smaller Featured

7:00pm EDT February 28, 2007

As improved technology continues to narrow the global communications gap, it is becoming increasingly important for many companies to expand internationally.

“The ‘flat world’ was created by today’s access to split-second communication enabling individuals to retrieve information faster than ever before,” says David Lanier, managing director of brokerage and corporate services for CB Richard Ellis in Atlanta.

Smart Business talked to Lanier about the importance of a company’s ability to go international.

How has the flat world theory changed companies’ real estate needs?

It has made the world smaller from a communication standpoint. However, companies must establish or retain a physical presence in most of those major markets where clients want to expand. A real estate company, for example, still needs its people on the ground in India, China, and Europe to service those clients whose business has grown internationally.

Are more domestic companies seeking a presence overseas?

International expansion is not for everyone, but if your company is involved in the communications, financial services or technology industries, you either have a global presence or your competition will pass you by.

How difficult is it to build an overseas presence? Do you staff with Americans or people native to the country?

Staffing should include a combination of people from the United States as well as natives of the country. For client satisfaction reasons, I think the most effective way, however, is to have your own people on the ground. That way you can look your clients in the face and assure them by saying, ‘You know what, when you go into those foreign markets and you feel a little unsure, you have a CBRE person on the ground with you.’ If that is not possible, the next best alternative is staffing through alliances or joint ventures with existing firms already in those locations.

Are more domestic companies opening branches overseas?

Absolutely. In real estate, our clients demand it. If you are a small- to mediumsized firm seeking only domestic businesses, then you do not need to be international. But for a global service company like CBRE to maintain or grow its international client list, especially on the corporate side, a presence overseas is critical. The size and scale of a large real estate company makes the international market feasible and the expenses associated with growing in emerging markets manageable.

How hard is it to purchase real estate overseas?

The answer varies from market to market. Whether a company wants to buy or lease also depends on the market. Doing business varies greatly from market to market, due to cross-cultural differences, reinforcing the importance of having local influence and local expertise inside your company.

What’s the process when a client is looking to get into real estate overseas?

We have centers of excellence, or expert centers, where we can refer a client. For example, if an Asian client wants to open a foreign office and needs help or advice in doing so, there is a specific group of people with whom they can work with to start the process for any type of real estate service from a multi-billion dollar investment to a single distribution center.

For U.S. brokers, it’s an easy process because it’s not simply a hand-off. No client wants to feel like they have been abandoned and passed off to someone else. It is okay, however, to say, ‘Sir, here is the number to the desk of my contacts in the Beijing office. They’re the experts in your market and I am completely comfortable putting you into their hands.’

Are companies that are not international at a disadvantage?

That’s such as broad question. It depends on the business of the companies. I can’t think, however, of many companies of considerable size and scale that would not benefit from branching out to international markets.

DAVID LANIER is managing director of brokerage and corporate services for CB Richard Ellis. Reach him at (404) 504-7906 or david.lanier@cbre.com.