In so many ways, real estate constitutes the ultimate local business. Based on the ground beneath our feet, whether we're standing in Washington or Phoenix, Chicago or Orlando, real estate serves the people who are rooted in those cities and suburbs. They know the fastest roads to take to work, the ideal fields for their softball leagues, and the coolest neighborhoods for shopping, dining, and renting. So do the best multifamily acquisition and development specialists, who prove the value of their knowledge over and over again through smart deals that give their firms the hottest properties on the block.

But local expertise only goes so far in today's world, where even the American apartment industry is becoming increasingly affected by global influences. From Las Vegas to South Beach, investors from China, South America, and elsewhere are still snapping up condos. In Texas and California, apartment companies are updating their properties to appeal to the ever-growing number of Latino renters. And, in boardrooms around the country, multifamily executives are confronting the reality of operating an inherently local business in a global world.

Alison Rice
Katherine Lambert Alison Rice

Skeptical? Think about the players involved in the past year's big deals. "Morgan Stanley and other similar funds are all going global. They have the ability to garner capital from any corner of the globe," says Tom Toomey, CEO of public apartment REIT United Dominion Realty Trust, one of the country's largest apartment owners and operators. "They will become asset accumulators because they are able to match global funds to the opportunity."

Such influence isn't only being felt at public companies, whose CEOs are saying goodbye to Wall Street and going private. Private apartment firms are encountering the overseas interest in American real estate, directly or indirectly, every time they pursue a property or portfolio and swallow hard at the price. "There's been a little bit of a perfect storm," says Stephen Blank, senior fellow for finance at the Urban Land Institute, which follows international as well as domestic real estate trends. Foreign investors, as well as homegrown baby boomers and pension funds, all want to put more of their money in multifamily real estate. "Everyone's looking for a safe haven," Blank says, "and U.S. yields have traditionally been higher than offshore yields. The U.S. is also the safest geopolitical market in the world."

We also have another factor in our favor as far as overseas investors are concerned: liquidity. "From a real estate yield standpoint, the U.S. is the most sophisticated, liquid, and fluid market in the world. In Europe ... real estate is slowly traded, if at all," says Wayne Vandenburg, CEO of TVO Realty Partners. He should know. Vandenburg is also CEO of Coldwell Banker Europe and travels hundreds of days a year, making him just as likely to BlackBerry you from Paris or St. Petersburg as he is from Chicago, where TVO is based.

Such globetrotting has given the CEO a first-hand view of the forces affecting so many corners of the world and how they do business as information flows back and forth between borders. "Everybody is changing," says Vandenburg, sounding a bit like Thomas Friedman, the influential

New York Times columnist and author of several books on globalization. "The Europeans are changing as much as the Americans, who are changing as much as the Japanese, who are changing as much as the Chinese."

And they're all very interested in American real estate.