By Steve Bergsman
How to Successfully Manage Cross-Border
Cross-border transactions have the tendency to either torment commercial real estate brokers or, conversely, to miraculously appear at
the right time in the course of seeking new business. Some brokers
fear these situations, others welcome it.
Whether your heart palpitates at the thought of an international
play or not, it has become much easier over the years as the small
incidentals that often tripped up novices have now been exposed.
In addition, most brokers doing deals overseas belong to large
international firms with other associate brokers nestled in hundreds
of cities across the globe. For the independents, there’s always the
SIOR network, which now boasts a much deeper presence in global
markets than ever before.
Here are the basics. Once you cross the border, things change;
whether it’s fees, negotiating processes, regulations, and/or ownership rules. You might not know those differences so it becomes
imperative to find the person who does, and who can help you on
The same holds true for foreign investors coming into your market. They may not be familiar with your regulations, and when they
knock on your door you have to be the source of information, the
guide through the processes, and the procurer of legal services, if
It’s not always easy dealing with U.S. corporate clients who want to be
overseas, says Paul Waters, SIOR, CCIM, CRE, FRICs, an execu-
tive vice president with NAI Global in New York. “The fee structure is
different. In Europe, landlords don’t pay the fees, the tenant does. You
don’t have the same industry stringent requirements for practitioners.
There are also differences in zoning, use of building rules, and taxes,
and you have to dig deep for ownership.”
Waters’ solution is to work with an NAI Global associate, and, as
he says, “find a really good counsel and pay a premium for any work.”
Even with that, things happen. Waters give this example: He had
a food manufacturing client that wanted to build a new manufactur-
ing facility near Moscow. One of the most important requirements
for the site was having water accessible 24-7, but there was no guar-
antee that the site being proposed could accommodate. “The client
wanted the tenant to make an infrastructure investment of close to a
half million dollars,” Waters recalls.
How did Waters resolve the impass? He worked with a quality
broker from a rival company who found a pre-existing structure with
a historical water supply. On smaller jobs, Waters relies on the NAI
network, but on any space over 150,000 square feet, he boards a
plane, flies to the location, and does his own on-site inspections.
“We had a three-page list of things that had to be done along with
photos,” says Wernisch. When the list was accomplished, the building sold.