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Foreign investment a natural in Downtown Atlanta

May 19,2014

via Atlanta Business Chronicle

By Cherie Ong

Being a foreigner is never easy. We tend to hold a different point of view from locals. We often get accused of not understanding the local context. But really it’s a no win situation by the very definition.

Once in a while we find solace with local “outsiders,” “nontraditionalists” or other fellow travelers who perhaps were themselves foreigners at one point in time. Here’s the irony. If you dig a little deeper, we are most likely the mainstream in our own countries or continents of identity. Our views are still shaped by the perspectives, opinions and cultural values of those we grew up around. So in one sense we are traditional, just not here.

I’m an Asian Australian (now almost American) married over 12 years to a Caucasian “Georgia boy,” and representing a Hong Kong-based real estate investment group. Our company, The Creations Group, targets private equity real estate investors, primarily high-net-worth individuals or family trust funds throughout Asia and Australia. We invest in and manage real estate funds in both these regions but for the last four-plus years our primary attention has been in the market for underdeveloped property in the United States. Our U.S. office is headquartered in downtown Atlanta (south Peachtree), and we love it here.

Why the U.S.? Why now? Our team garnered direct feedback from our overseas investors and brokers. Here’s a sophisticated summary of all the economic forces at work globally and within Australasia: recently introduced capital controls across Asia are making it expensive to invest in local regions and tightening the margins on already low yields; China/Hong Kong and other major cities in Australia are no longer affordable and opportunities are fewer; the cost of capital remains relatively high compared to rates in the U.S.; and the U.S. dollar remains low compared to currencies in Asia/Australia, so timing makes sense. The list goes on. But why overcomplicate things when everything can be dramatically simplified (at the risk of reinforcing stereotypes of my own descent)? Asians like to drive a hard bargain. Their mantra, “never pay more for something if you can get it cheaper somewhere else,” applies also to real estate investments. For the more mathematically inclined it equates to something like this: Good relative deals + Cash = Better deals. Better deals + Mantra = More Asians investing in U.S. real estate funds.

Why Atlanta? Here’s the hard truth (with a little tongue in cheek). Most of our larger overseas investors have never stepped foot in Atlanta. They know New York, Los Angeles, maybe San Francisco, Texas and Chicago, but more likely Disney World. Nonetheless they are good at looking at maps and masters at crunching numbers. They hear Coke, CNN and world’s busiest airport and suddenly it’s not a bad proposition.

Atlanta is one of the few cities that still offers affordable deals and unique opportunities relative to its better-known counterparts. Combine the fast demographic growth, with respected universities and many Fortune 500 companies headquartered here, and what you have are fundamentals for a strong recovery. According to CNN Money, Atlanta is among the top 10 cities favored by Chinese investors.

Why downtown specifically? When you talk to investors abroad, all they care about is location, location, location and that is relative to the CBD.

Our first purchase downtown was the original Rich’s Department Store at 82 Peachtree. There was nothing traditional about how we approached leasing but we went from 95 percent vacant to now over 70 percent occupied in our office space in under two years.

Finally, since this is a Viewpoint, I suppose it’s not complete without my personal opinion, being not just downtown everyday but south of Marietta. I love walking around in and amongst the shoals of GSU students and office workers, and passing by the occasional homeless person … on the way to devour an oversized bowl of hot Vietnamese Pho on Broad Street. Seems like there’s something special about the combination of grit and charm here that makes me feel right at home again.