Compass Group Productions

multi-million/billion dollar ideas: solve for "X"

multi-million/billion dollar ideas:  solve for "X"

• social media marketing for all businesses is increasing by 75% - and growing!  create a software for business owners that will help them track ROI on all their SMM (Social Media Marketing) campaigns.  there are very few tools out there.
• by 2030, 40% of Americans will be overweight.  create the next P90X, Jenny Craig, Sensa...make it cheaper and faster!
• Apps are the future and we've just scratched the surface.  create a software that will allow any consumer (with no coding experience) the ability to create a first class app!
• ebooks are also the future!  create a better means to create and distribute ebooks...and pay a higher commission than Amazon, Apple, and Barnes & Noble.
• find the next "superfruit!"  bottle it or make it into a pill...then, have Costco sell it! 
• create the next wrinkle cream.  the Babyboomers are already old, and the Gen X'ers are getting old - they will buy it!
• create little studios across major malls, Walmarts, and Targets throughout the nation.  these studios will focus on helping anyone that wants to create their own micro tv show (with a higher production value) for youtube, vimeo...  studio time will be cheap, and will have in-house directors and writers.  producing "higher-end" micro videos are the future.  youtube spent $200M for professionally produced content...new shows rolling out at the end of summer.

create any of the above and put me as one of your board of directors...with a shit load of stock;) 

Video Marketing

Dear Realtors, instead of emailing your clients your typical MLS brochure...go and purchase a decent camcorder, take a class on shooting & editing.  Then, shoot a 3-4 min "hosted" (with you in it!) video tour of your listing...don't forget to add info on the surrounding area.  This is 1,000 times more effective than your "text heavy" MLS brochure with the little (or sometimes missing) photo on the upper left corner.  Also...FYI, clients hate reading these print outs.

Negative Outlook for Arabian Gulf Real Estate Market, Reports Moody's

The outlook for the Arabian Gulf real estate market for 2009 is negative, reflecting tightening access to funding, declining demand and a need to preserve cash, says Moody's Investors Service in a new report entitled "Arabian Gulf Real Estate Market Industry Outlook".

The report expresses Moody's expectations for fundamental credit conditions in the industry for the next 12-18 months.

Martin Kohlhase, an Assistant Vice President-Analyst in Moody's Corporate Finance Group, explains:

"Although drivers of demand vary considerably among the Gulf Cooperation Council (GCC) countries, residential and commercial real estate are under pressure due to lower demand, lack of funding, worsening consumer sentiment and risk of over-supply."

Mr. Kohlhase adds, "Saudi Arabia is the notable exception as it benefits from a large and growing indigenous population base and structural under-capacity for residential property, especially for low- and middle-income families."

Moody's notes that obtaining financing has become more challenging since September 2008 and a nascent mortgage industry cannot fully compensate for a funding shortfall from other sources. Negative market sentiment has also kept away many buyers who are no longer willing to acquire off-plan property (or the capacity) and thereby provide a source of funding through down-payments.

"Furthermore, long-term population growth rates -- in excess of 5% for most countries in the region -- are no longer realistic in the short term and may become negative over the coming quarters as investments in commercial activities, including foreign direct investments, are drying up," cautions Mr. Kohlhase.

Companies have also started to lay off foreign employees, which could negatively impact demand for residential properties, as some markets appear to be over-supplied. Thus, Moody's believes that the advanced markets (Dubai and Doha) will be impacted the most as expansion plans in these markets have assumed a steady influx of expatriates. Instead, these markets have witnessed a decrease in property prices and a slowdown in construction activity. Moody's notes that many projects, particularly in Dubai, have been undertaken in anticipation of future demand, which may not materialise.

Moody's also understands that real estate companies have generally put the majority of planned, but not yet commenced, projects on hold, whilst completing or consolidating those where construction has started. Completed but unsold projects will have to remain on the balance sheet. Furthermore, companies with (uncommitted) short-term bank lines -- which are more common in the Gulf region than in more mature markets -- may face increased refinancing risk.

However, Moody's notes that public infrastructure spending remains buoyant on the back of economic stimulus packages, which have been bolstered by government surpluses accumulated during the period of high oil prices. Furthermore, most real estate companies in the region benefit from strong government support, which in turn underpins their ratings. Moody's expects such high levels of support to continue.

Moody's currently rates seven companies in the GCC region that have real estate-related activities. Some are conventional developers, whilst others operate free zones or cater largely to a certain industry. The majority are government-related issuers.

3 trends in Central American real estate as developers and buyers respond to market conditions

Times are certainly tough.  But sometimes its the tough times that provide space for innovation and new ideas.  Yes, some real estate projects in Central America are stalling, but others are responding to the tough economic news with new products and attractive incentives to persuade buyers to purchase.   Here are 3 trends that we’re seeing in the Central America real estate scene.

1) Developers are going to greater lengths to woo buyers

Developers, particularly those at early pre-construction stages, are pulling out the stops to generate sales and maintain project momentum. From guaranteed rental agreements, free in-country tours where all expenses are paid, lot/home packages where the home is built at cost, to attractive seller financing, special programs for defaulting buyers and even buy-back guarantees.

As one real estate agent remarked,  ”It’s a way sellers can drop their prices without really dropping their prices.” Developers know that momentum is king.  A stalled project is hard to re-start and prospects quickly sense a lack of activity and progress.

2) Plans are being scaled back, pushed back and offerings altered

Months are being added onto construction time-lines for golf courses, clubhouses, restaurants and even basic infrastructure work.  Developers are no longer emphasizing trophy apartments and ostentatious mansions.  Instead they’re releasing simpler, smaller and more functional properties more in line with the current economic mood.

Some are fractionalizing existing real estate to offer a more accessible price-point.  There’s also more focus on green building to appeal to a demographic whose decisions take into account social and environmental considerations.

3) Re-sale properties offered for less than developer direct sales

Existing owners who are feeling the pinch are motivated to flip their properties and some are pricing them well below developer prices.  In situations where they purchased pre-construction, the price for re-sales can be as much as 30-50% lower.  Re-sale properties are harder to track down and don’t always have the same marketing support as developer direct sales.  But right now, it’s worth putting in the effort to dig them out.

Guilt trip: Luxury travelers tone it down in hard times

 She had planned to visit the Medina in Fez, the souks in Marrakesh and the mosques in Casablanca. But the Moroccan vacation would have set Nancy Yale back $15,000 for her family of five. And after laying off a full- and part-time employee last fall, the travel agency owner in Fairfield, Conn., decided to scrap the December trip.

"I just didn't think it was prudent. It wasn't a good message," she says.

Call it luxury shame, stealth wealth or guilt downsizing. Even if you've "got it" — and maybe especially if you've got it — economic times like these are no time to flaunt it.

In a time when posh has become a four-letter word, forget about keeping up with the Joneses. It's more socially expedient to stay down with them. Economic turmoil is giving luxury a bad name, it seems, and not just among the private-jet set, either. The desire to tone down consumption is affecting how some Americans vacation — or at least how they say they vacation.

It's the sort of environment that has people claiming they got that winter tan on the local ski hill, when in truth, they were skiing in Gstaad. Or, for appearances' sake, hailing a cab from the airport instead of pulling up to the hotel in a town car — never mind that the fare's the same.

The sentiment resonates in cyberspace and includes travelers who say they're lying or feeling guilty about their vacation plans or simply keeping mum about them.

Even former Securities and Exchange Commission head Arthur Levitt hasn't escaped a guilt trip, telling the New York Times Magazine he canceled a spring trip to the Far East, because "I don't feel right about spending large sums of money in this environment."

"Luxury shame is very real," says travel industry analyst Henry Harteveldt of Forrester Research. "When your neighbors are losing their jobs and you're doing well, you don't flaunt your success. Of course, there are still people who will continue to enjoy the fruits of their success. They may still rent the beachfront home and continue to fly in the G5 and tool around in the leased Bentley, but they're not going to go home and brag that that's what they did on vacation."

In a recent survey of travelers' intentions, Forrester found the solidly middle class intended to cut back on travel, but so did 28% of those with household incomes of $100,000 and above. "It shows that the well-to-do are not being spared by this recession," says Harteveldt.

Neither are the wealthy, even if it's just for appearances' sake. One of Yale's best clients canceled a pricey trip to Asia explaining, " 'It's too embarrassing to tell anyone I took a $40,000 vacation,' " she says.

Josh Friedman, a luxury travel consultant in San Francisco, relates how a wealthy Pasadena couple, "the kind of people who book $3,000-a-night suites," called him to say they're cutting back 50% on everything and had him redeem frequent-flier miles for a trip to the East Coast. Another client who booked a $30,000 luxury European cruise with extra nights in Athens and Rome lopped a night off to assuage his guilt over spending so much. It cut the price by a mere $1,000 or so, but "it made him happy," says Friedman. "He realizes times are tough."

Beverly Hills-based Gary Mansour, CEO of Mansour Travel Co., says his affluent clients are still traveling: They're just being more discreet about it. Maybe they'll downgrade from their own private jet to a seat in a shared one. Or they'll pop open a bottle of Cristal in the privacy of their hotel room rather than in a restaurant, he says.

Not that excess — wretched as it may be regarded these days — isn't thriving in some decadent corners of the beleaguered economy. In fact, at the newly opened Encore Las Vegas casino, the nightclub, XS ("where too much is never enough"), offers a $10,000 Cognac and Champagne cocktail (includes stingray cuff links for the gentleman and a gold necklace for the lady). A few miles away, the Palms Place Hotel and Spa has reintroduced its $120 Veuve Clicquot Pedicure, back by popular demand.

The upscale Caribbean island of Anguilla issued a press release in January boasting about the traffic jam of private jets on its runway over the holidays. A marketing pitch for an $18,000-a-night private resort in Barbuda asks without a hint of irony, "Who says luxury isn't still affordable in tough economic times?" And in Waikiki, the Halekulani Hotel just rolled out a fleet of over-the-top vehicles, including a custom Maserati GranTurismo and Lotus Exige S, for its well-heeled guests to tool around in. (Those booked in the $7,000-a-night Premier Suites get the cruisers at no extra charge.) While CEO Peter Shaindlin acknowledges that tough times can spark traveler guilt, the flashy cars are "about quality. I don't think there's anything embarrassing about quality."

Perhaps. But in some quarters, lean times have sparked a shift in marketing messages. The Ritz-Carlton chain, which in the past has trumpeted luxury amenities bordering on the absurd (bath butler, anyone?), is playing up its altruistic side. Give Back Getaways, launched in April, puts willing guests in a half-day local volunteer effort. Response so far has not been huge, says spokeswoman Sue Stephenson, but a sister program, Meaningful Meetings, which donates 10% of a participating group's room revenues to charity, has resulted in $420,000 in donations since 2007.

Virtuoso, a travel-agent network that specializes in luxury travel, has similarly tweaked its message. In December, it launched a "Return on Life" advertising campaign that stresses authenticity over opulence.

"People are traveling less for bragging rights these days," says Virtuoso spokeswoman Misty Ewing. "Luxury travel had an (image) of self-indulgence. But the mind-set has changed. It's really about wanting to spend quality time with family and friends."

The Leading Hotels of the World group of high-end lodgings has shifted its emphasis, too. "In contrast to last year, we aren't marketing over-the-top. We're marketing more value-driven packages," says senior marketing vice president Claudia Kozma Kaplan.

At Abercrombie & Kent, which bills itself as "the world's premier luxury travel company," interest in trips that incorporate a philanthropic element is on the upswing, says spokeswoman Pamela Lassers. The company now offers six itineraries, up from two. Conversely, a sale in February that promoted savings of up to 60% on trips such as luxury African safaris and Egyptian cruises signals less-than-vigorous bookings on A&K's more self-indulgent tours.

Some in the industry believe the recession is sparking a behavioral shift that will continue even after the economy improves.

"We're witnessing a change in consumption patterns," says Karen Weiner Escalera, a publicist who writes a newsletter and blog on luxury travel trends. "People are looking more at function and comfort and authenticity."

She predicts that luxury as a marketing pitch will lose ground to messages that focus on niche interests as people pursue true passions rather than indulgence for the sake of indulgence.

Not that so-called luxury shame is necessarily bad for business. On Grand Cayman, The Reef Resort, a midscale all-suites hotel on a predominantly upscale island, director Tom McCallum believes he has gained some guests this season who in better times would be checking into digs that cost more than the $250 a night he has been charging.

"We're definitely getting people who would have grabbed a luxury hotel last year," he says. "People still want a Caribbean vacation, but they want to tell themselves they haven't spent as much money. They're being more selective."

But they're still traveling. At Ellison Poe's Little Rock travel agency, sales of midrange package tours to Europe may be down, but bookings to exotic locales such as Sri Lanka and Madagascar are up, thanks to deals being snapped up by people whose bank balances or credit limits still allow it.

"I feel like a Turkish rug salesman," she says. "These deals won't be here in three months, so if you have the money, you should take advantage of it."

That's Jackie Ross' sentiment exactly. The retired Bellingham, Wash., hypnotherapist sailed the eastern Caribbean in February, her third cruise in a year. She and her husband have always been avid travelers, and it's not unusual for friends to ask them where they're off to next. These days, however, her responses are more circumspect. "I'll say, 'Oh, we're just going somewhere warm for a while,' " she says. "It's general sensitivity. There are just so many people who are going through so much. We've been affected by the stock market, too. But we'd planned this cruise, and we're going to go."

They'll be sailing again next year, too. "We weren't going to," Ross says, "but a really good deal came up."

- USA Today

Visit Abacus nowVisit Tourism for Tomorrow to learn more Medical Tourism: Vaccinated Against the Recession?

A forecast by Deloitte Consulting published at the end of 2008 projected that medical tourism originating from the US alone could jump by a factor of ten over the next decade.

Reading the economic section of the newspaper has never been more depressing than over the last few months. The news is dominated by headlines of the failing economy with stories about the crumbling financial and real estate industries, the halt of manufacturers' production lines as well as companies announcing yet another wave of job cuts. The tourism industry has not gone untouched.

In December 2008 the World Travel Organisation (UNWTO) forecast that in 2009 there would be a decline in international tourism of approximately 0- 2%. Such a decline does not seem that bad when compared to other sectors, however this is the first time since the Second World War that the tourism industry will have negative growth or, at best, flat growth. Whoever claims to be untouched by the recession, whether it be a country, industry sector or company, will be looked upon with scepticism as people think they are either in denial or simply have not yet been directly hit. But is every sector really suffering from the economic turmoil or do recession-proof sectors exist?

The current economic downturn is testing one sector that has long been believed to be recession proof – the health care sector. It seems that even though the residential real estate market has fallen flat, banks are still willing to lend money for medical space development since there continues to be a rise in demand. If you break an arm, for example, seeking treatment is not optional. According to the Association of Executive Search Consultants (AESC), search consultants anticipate that executive job opportunities in the health care industry will increase by 32%.¹

This is good news for hoteliers looking for a job, since some hospitals and clinics recruit hotel General Managers to run their operations. For the hotel industry at large, the even better news is that within the health care economy, there is one small sector that is booming: medical tourism.

Medical tourism is a term used to describe the rapidly growing practice of travelling across international borders to obtain health care. Such services include not only short hops to Colombia for a nip and tuck, but also trips for infertility treatment, dental surgery or complex specialised procedures such as joint replacements or cardiac surgeries. To minimise the dangers of travelling soon after the operation or simply to take full advantage of the trip, medical tourist patients often combine their medical trips with vacation time set aside for rest and recovery in the destination country.

A number of travel agencies now offer "health care holidays". In South Africa, for example, low-cost plastic surgery can be followed by recuperation on a safari, away from friends or family who might disapprove or stare at post-op wounds or scarring. Nearly every operation is followed by a few days in a nearby luxury resort where the patient can relax, recover, and do some sight seeing.

Medical tourism has been with us for many decades. Thousands of years ago, health pilgrims travelled to mineral-rich thermal springs and during the 16th Century, medical tourism experienced a boom in Europe where tourist towns grew in places like Baden Baden, Bath or St. Moritz. However, globe-trotting patients only ever occupied a niche. What is getting people really excited today is the fact that medical tourism is on the threshold of a dramatic boom and is quickly becoming the only viable option for more and more people.

According to a study published by Deloitte Consulting in August 2008 the number of Americans travelling abroad for treatment will increase from 750,000 in 2007 to 6 million by 2010 and reach 10 million by 2012. The authors reckon that this exodus will be worth US $21 billion a year in developing countries in four years time. The forecasted growth is particularly important in the US since around 46 million Americans lack health insurance and other tens of millions have minimal insurance coverage.

Europe's state-funded systems still give patients a reason to stay at home, but even here, private patients may start to travel more as it becomes cheaper and easier to get treated abroad or as they become impatient with long waiting lists for treatment.

The key factors fostering the growth of this industry include:

Quality & Price: An increasing number of hospitals are gaining international accreditation and common surgical procedures can be done in world-class hospitals for about a fifth or less of the price charged in American hospitals. Asian hospital chains stand to be the biggest winners with one of the most famous hospitals being the Bumrungrad in Thailand.

Bumrungrad has been described as the "United Nations of hospitals" since it attracts more foreign patients than any other hospital in the world. It is run as a five star hotel (on-site valet parking, team of interpreters to help with language problems, limousine pick-up service at the airport) and is considered one of the top hospitals in the world with treatment here costing about one-eighth of what it does in the United States. There are also "local hospitals" going global. In recent years leading American hospitals such as the Mayo Clinic and Johns Hopkins have set up offshoots in the Middle East and Asia.

Convenience & Speed: Two major draws to medical travel are the convenience and speed. Countries that operate public health care systems are often so taxed that it can take considerable time to get non-urgent medical care. In Britain and Canada it could take 1 year to get a hip replacement, while in Thailand, for example, it can be done within a week.

Global Economy: A new global citizen whose life and work transcends borders is emerging. Many people no longer live exclusively in their country of origin and are becoming increasingly mobile in both their temporary and permanent work assignments. These global citizens are willing to pay for the healthcare systems which match their global lifestyle.

Global Private Health Insurance Coverage: In an attempt to stay competitive and referring back to the "global citizen", there are a number of private health insurances who offer global coverage including costs of transportation. After all, if it is cheaper for the uninsured patient to go global, it is cheaper also for the insurer.

It is no surprise that, given the attractive growth forecasts of this sector, various countries are trying to promote themselves as "health care destinations" to get a piece of the pie. According to McKinsey & Company, the top 5 medical tourism destinations are currently Panama, Brazil, Malaysia, Costa Rica and India. India in particular is looking to become the world leader in medical tourism.

Last year India received around 150,000 medical tourists and is forecasting an annual growth rate in this sector of 30%. The Middle East has also tried to learn from these destinations and is trying to create local brands in order to attract international patients and insurance companies. One of the most well known medical tourism projects in the Middle East is Dubai Healthcare City. Dubai Healthcare City was designed not only to attract medical tourists but also to reduce the need for residents to travel abroad to receive high quality treatment.

As these health care destinations develop, so does the need for more traditional local services such as hotels, restaurants and other commercial property. In order to offer attractive medical packages these developments actually go hand in hand. If we take Dubai as an example, surely the current economic environment putting several tourism related projects on hold will not help promoting Dubai as a medical tourism destination.

Additionally, the number of expats leaving the country will also put a strain on the system. In fact, Tatweer has apparently put some projects in Dubai Healthcare City on hold. Another point to consider is that during tough times, we assume that medical tourism will accelerate due to its vastly lower cost, but on the counter side, a lack of cash may impact offshore medical business since customers just don't have the money for non life-threatening surgeries like cosmetic surgery, dentistry, and Lasik/laser procedures.

The recession proof vaccination in health care tourism isn't 100% effective and Deloitte's estimates in the current environment are probably over optimistic since these were published only a few months before the entire financial meltdown. On the other hand, HVS Executive Search will keep a close eye on this sector since medical tourism is still shining in this dim economy and there is evidence that the future of health care promises to become increasingly global.

By Lorenza Alessie

How will the global financial crisis impact real estate in Central America?

The global financial crisis and it’s impact on international real estate is topic of discussion number one among real estate analysts in Central America.  It’s still too early for clear predictions, and the tricky part is that the arguments being presented paint widely different scenarios.

On the one hand, large-scale real estate projects, especially if heavily leveraged, will be vulnerable as the economic mood darkens.  The suspension of the St Regis project in Costa Rica in the wake of the Lehman Brothers collapse is a case in point.  But, perhaps more important than the direct impact of the international financial crisis - the argument goes - is it’s indirect effect as financing becomes scarce.

But, when looking at the Central American market place, it may not be as simple as that.  First, the majority of international real estate buyers make their purchases in cash.  Granted there are isolated pockets of finance-driven speculation (for example Panama City, Panama and Jaco, Costa Rica), but the broad foreclosure waves as experienced in the US are unlikely.  Second, international real estate markets, and Central America included, could be seen as smart choice by investors looking to shield themselves from a volatile stock market and recessionary trends in the US and Europe.

A portfolio play or a lifestyle choice?

US citizens looking to get a percentage of their assets outside the US may see an investment in Central America as a portfolio play rather than a lifestyle choice.  But at the lower end of the market the arguments could play in the opposite direction.  Here if buyers see their chances of retiring in, say, Florida unwind, they may seek out locales where the real estate is cheaper and, crucially, the cost of living more affordable.

It’s more important than ever to focus on quality

The results will be mixed both within and between countries.  Investment activity will trend towards well-planned developments with good locations, quality products and a master plan that delivers against end-user requirements.  The real estate developments that have only done well in the past due to speculation rather than the quality of their product will likely suffer.  Many will stall.  Investors will do well to avoid areas with oversupply risk and a glut of copycat developments selling pre-construction. 

At least everyone agrees on one point: Central American markets will not be immune.  But when we’ve managed to take a deep breath and look around; we may see healthier, more sustainable real estate markets, less dependent on loans and speculators.

- Reveal Real Estate

The World’s Top Property Hotspots for 2009

International real estate investment specialists Property Frontiers have named their top six property investment hotspots for 2009 – and the list contains some surprises. Panama, the Central American republic tops the list due to a strong economy, a favorable tax regime and offshore banking attracting businesses from across the globe. Investors can choose a variety of different options, from hotels enjoying high occupancy rates, to offices, and beach side resorts. The expansion of the Panama Canal looks set to underpin future economic growth. The Malaysian capital Kuala Lumpur is a thriving city with affordable property and accessible cheaply with a new budget airline linking direct to London with flights from just £99. Outside of Kuala Lumpur is the teeming tourist playground of Sabah on North Borneo.

Where Brazil is a booming economy and with sun, samba and a cheap cost of living, is taking over from Florida as the fun capital of the world – and is the same flight distance from London as Miami. Tourism is lifting off around the northeast city of Natal, which boasts average daily temperatures of 28°C all-year-round and mile after mile of sandy, palm fringed beaches. If traditional buy-to-let is the target, Sao Paulo is one of the world’s largest and fastest growing cities with an insatiable demand for quality accommodation. Slovakia’s High Tatras national park offers all-year round tourism as a UNESCO area of outstanding natural beauty. In the summer, the mountains are an attraction for walkers and golfers, while in the winter cheap skiing lures visitors from all over Europe.

The USA is tipped as one to watch as prices bottom out. Apartments in Florida are selling at 54% lower than their launch price, and according to the builders, at less than their build cost and offer an instant 6% rental return. Coming in last is the UK, with property bargains piling up at auction houses and market commentators still forecasting that prices are stagnating or still falling in most areas. “In real terms the pound is at a point not seen for 10 years. This offers a fantastic buying opportunity for international investors. As a company we have never seen so many inquiries from our international investors looking for UK property. A combined depreciation of the pound and the market now makes UK property some 54% cheaper than a year ago.

For the first time in our history, the emerging markets prices are to be found on our doorstep and not halfway around the world,” said Property Frontiers sourcing manager Ben Jefferis.

- Property Frontiers

Emerging Markets Bullish on Real Estate

A few emerging market countries, such as Brazil, Mexico, and Turkey, are seeing their real estate markets soar, according to a recent series of Knowledge @ Wharton (KW) reports.

The countries whose real estate markets are doing well tend to depend less on credit. “Countries that had easy access to debt, Western Europe [and] Japan among them, are being affected the most [by the financial crisis],” said Gary Garrabrant, CEO of Equity International Inc., a global real estate investment company that focuses mainly on emerging markets.

“Those countries [that are emerging markets] with access to debt capital, Brazil for example, are being affected less,” he continued.

Pitfalls in Emerging Markets

But not all emerging markets prove to be a good place for real estate investment.

“Corruption and lack of transparency ranked high on participants’ lists of reasons to avoid particular [emerging] markets,” according to participants in the 2009 KW Real Estate in Emerging Markets Forum.

Poor infrastructure, unhealthy regulatory environment, corruption, bureaucracy, deficient legal environment, and lack of transparency are impediments to real estate ventures in many emerging markets.

The experts agreed that a trusted local partner is essential in any successful emerging market real estate venture.

“Overall a big cultural divide remains,” a recent PricewaterhouseCoopers (PwC) and Urban Land Institute report said. “You need to be prepared to work back channels. Don’t even think about doing business in these [emerging market] countries without local partners … everything is based on personal relationships and all business is conducted face to face.”

Markets to Avoid

Getting involved in real estate in Russia should be avoided at all costs, as the government uses the minutest problem to expropriate a profitable company, the reports read.

“In Russia, they just steal your company,” said Mark Weiss, president of JER Investors Trust Inc., a real estate investment trust (REIT). He related a story about one firm that was taken over by the Russian tax authorities, leaving its foreign owner with no legal recourse.

Vietnam is “totally crippled by bureaucracy,” advised Eyal Ofer, chairman of Ofer Global Holdings Inc., based in Richmond, Va.

Forum participants said the Indian real estate market is filled with corruption, “bureaucracy beyond belief,” and an underdeveloped infrastructure. In India, every step of the construction process must be overseen and tested.

“I have been to apartments [in India where] the three steps leading to the front door aren’t there,” said Richard Johnson, CEO of Standard Chartered-Istithmar Real Estate Fund Management in Singapore.

Despite Africa having “great potential,” there is no infrastructure, corruption is high and the regulatory environment is either underdeveloped or nonexistent, and legal recourse for foreign investors is unheard of.

“Africa for example—outside Egypt and South Africa [that] have great potential for development, there’s no infrastructure and no talent to recruit,” one of the forum’s panel members said.

Healthier Markets

The trend is reversed in some markets. Turkey’s real estate market is booming. The banks continue to be healthy, highly liquid, and continue to lend in the real estate market to potential homeowners, suggested Bahadir Teker, CEO of Istanbul Mortgage Co. at the forum.

Some Latin American countries are experiencing rapid real estate growth as well. Brazil, Mexico, Peru, and Chile’s real estate markets remain relatively healthy, with a strong middle-class with spending power.

Brazilian banks have recently instituted 30-year mortgages and lowered the down payment from 50 percent to 30 percent, making home purchases easier, according to PwC research.

The Brazilian real estate company Cyrela Brazil Realty SA recently experimented with the construction of an apartment building.

“I did not want to go to the bank for a mortgage because the rates are very expensive. So I gave a proposal. We would launch the project if it could be self-financed. So, we were able to sell a whole building in about 48 hours, average 30 percent cash and the remaining 70 percent in 36 months,” Elie Horn, chairman of Cyrela Realty, said during the KW forum.

Cyrela Realty embarked on another apartment project in southern Brazil at the end of 2008. For this venture, it offered 10 years financing terms. Close to 50 percent of the apartments were sold during the first day and Horn was certain that the remainder would be sold within another three days at the time of the Forum.

Part of the reason why Latin American real estate is so healthy is that Latin Americans don’t speculate in real estate. To them, real estate is a tangible product that will not evaporate during financial crisis.

“At a certain point, real estate is a harbor. It is not a speculative business,” Horn said. “In Brazil, people buy apartments to live in, not speculate.”

- Epoch Times

RE/MAX Announces New Franchises in Ecuador and Uruguay, Top Spot from Entrepreneur Magazine

RE/MAX International announced that Master Franchises have been purchased for both Uruguay and the Republic of Ecuador. In 2008, RE/MAX sold over 700 franchises worldwide, and now has nearly 7,000 offices in more than 70 countries and territories, an international presence greater than any of its competitors.

“We are privileged to have these two Regions from South America join the RE/MAX Network,” said William Soteroff, senior vice president of International Development at RE/MAX International. “We look forward to a strong RE/MAX presence in both Regions and know that the training, education and brand name recognition we provide will attract both professional agents and clients.”

Brothers Esteban and Antonio Serrano purchased the rights for RE/MAX Ecuador and plan to aggressively recruit a host of new real estate agents and open local franchises. Antonio Serrano’s wife, Isabel Aguirre, will be Regional Manager and oversee daily operations.

Ricardo Sarniguet and Juan Carlos da Silva purchased the rights for RE/MAX Uruguay and will be Director of Franchise Sales Development and Technology, and Director of Legal, respectively. Patricia Perez will be the Assistant Manager for RE/MAX Uruguay.

RE/MAX Ecuador will be headquartered in Quito, birthplace of both Antonio and Esteban Serrano. RE/MAX Uruguay will be headquartered in Montevideo, the hometown to Sarniguet, da Silva and Perez.

“When you own a real estate office in Uruguay, you’re locally known,” said Sarniguet. “But when you own a RE/MAX Franchise office, the world automatically knows you and the brand starts working for you on day one. We strongly believe that RE/MAX will be a great asset to the professionalism of the real estate market in our country.”

“We’re excited for the opportunity we have to bring RE/MAX to Ecuador and to make a positive contribution to the development of the real estate industry here,” said Antonio Serrano, whose family has been involved in real estate for nearly 30 years. “RE/MAX is a perfect fit for the region and the power of the RE/MAX brand will help others who share our vision to sell real estate.”

With the addition of the new Regions, RE/MAX extends its presence in South America with existing franchises in Argentina, Chile and Venezuela.

Ecuador and Uruguay are on opposite ends of South America - Ecuador on the coast of the Pacific Ocean and Uruguay, on the coast of the Atlantic Ocean. Ecuador has a population of 13 million while Uruguay is home to 3.46 million people, almost half of which reside in the capital, Montevideo.

In related company news, RE/MAX International Inc., announced that the company is the nation’s number one real estate franchise - an honor the company has held for the past nine out of ten years - according to Entrepreneur Magazine’s 30th Annual “Franchise 500 Survey.” RE/MAX is also the top real estate franchise in two other survey categories, Best Low-Cost Franchise and Top Global Franchise.

“We have so much to offer our franchise owners, from a fundamentally sound business model with excellent education resources, to global brand recognition. So, we’re honored, but not surprised to find ourselves on the top of this list each year,” said Margaret Kelly, CEO of RE/MAX International. “We’ve enjoyed decades of growth and success and this ranking is recognition of the viability of the RE/MAX Network.”

The 30th annual “Franchise 500 Survey” appears in this month’s edition of Entrepreneur Magazine. All companies in the rankings are evaluated by financial strength and stability, size, growth rate, startup costs and financing options. These and other factors are entered into the Franchise 500 formula, with each eligible company receiving a cumulative score.
Entrepreneur Magazine’s The initial survey was conducted in 1980, and it was the first ever franchise ranking. Over the years, the ranking procedure has been refined to provide the most accurate formula for identifying today’s top franchises.

In 2008, RE/MAX was the only real estate franchisor to be ranked among the country’s “50 Top Franchises for Minorities,” by the National Minority Franchising Initiative. RE/MAX was also recognized as one of the “Top 25 Franchise Opportunities” by Hispanic Enterprise, and the Denver-based real estate franchisor was also ranked on the list of America’s “Top 10 Military Spouse-Friendly Employers,” according to Military Spouse Magazine.