By Himmat Singh – Management Consultant, RE Investor and PLG Board Advisor / B.S. Finance, George Washington University / MBA, Wharton School, University of Pennsylvania
Background
I have been blessed with a unique perspective and understanding of two distinct cultures and markets. I was born and raised in India, pursued my higher education in the U.S., and have been able to gain valuable experience in the arenas of investment management and real estate in both the U.S. and India. This has enabled me to gain insight into the factors which are important to Indian investors, the profile of their investment patterns and the risk / reward expectations which are ingrained into their investment DNA.
Concept
The genesis of my investment platform derives from my recent on-the-ground experience in the Indian real estate market. While in India, I realized that a whole new segment of people in recent years have created an enormous amount of wealth, a lot of which is liquid. Most of this wealth has roots in real estate. This segment of Indians is highly aspirational, savvy and has a global outlook. They have ambition to own global assets. They are also, in my opinion, a potentially large (and essentially dormant) investor block for real estate in the U.S. My business model provides for a robust investment platform for Indians, in India, to buy, sell and manage residential, commercial and investment properties in the U.S., specifically along the northeastern corridor, in Boston, New York, Philadelphia and Washington, D.C. In addition to bragging rights and rental yields, I believe that Indians would be keen to buy properties in the U.S. to take advantage of unique attributes of the U.S. market:
The best property rights laws in the world / A rock solid base of economic activity / Proven stability of rental markets / Embedded hidden opportunities new development, redevelopment and undervalued assets / Deep-rooted relationships (in the U.S) with developers, construction contractors, real estate brokers, asset managers, banks, equity investors and mezzanine lenders / A team of developers and builders with a proven track-record of successful real estate projects in the northeast.
Market Outlook / Northeastern U.S.
RE investment in India represents an opportunity to diversify asset portfolios while investing in a highly transparent market where relationship between supply and demand are clearly visible and market-driven. Unlike India, the U.S. offers title insurance and laws which protect property owners from squatters and localized corruption.
Why Indians find the U.S. to be an attractive option:
Risk mitigation / Very low country risk / Very low political risk / Diversification of economic risk / Diversification of currency risk / A more level playing field / A highly developed and efficient capital market / Transparency / Opportunity to invest in REITs / Less bureaucracy / Faster timeline to development / Better and more predictable construction quality / Higher FAR (FSI) / Clear and enforceable property rights laws / A stable and established rental market / Lower cost of land relative to total development cost / Lower, more predictable inflation / Access to low-cost debt financing / Unrestricted land supply.
New York City
Without question, the center of gravity of real estate in the U.S. (if not the world), is New York City. It continues to offer the kinds of commercial, residential and redevelopment opportunities that other cities can only dream about. What makes NYC so different and so attractive is an economic engine which essentially insulates it from the economic vagaries affecting almost all other American cities. NYC continues to attract foreign immigrants, who have historically been the driving force behind its vibrancy and energy. Today, NYC is a global city with few peers. Its continued growth stems from leadership in six different industries: tourism, finance, real estate development, high technology, higher education and media. NYC is home to world-class technology companies (Google, Bloomberg, and Facebook), top universities (NYU, Columbia, Baruch, Fordham), top financial institutions and top-tier developers.
Washington, D.C.
The nation’s capital continues stand alone as a real estate stalwart. Like NYC, the Washington, DC real estate market tends to be highly uncorrelated with the rest of the U.S. real estate market. A national center of culture, government, the arts and education, our capital city has been the catalyst for the transformation of the entire region including northern Virginia. The area has become a technology and telecommunications hub.
Boston
The cradle of the American revolution, Boston is the center of American intellectual thought and home to some of the finest universities and colleges, including Harvard, M.I.T., Tufts and Boston University. The city retains its old world charm and embraces its historical roots as one of America’s oldest and most beloved cities. The greater Boston region is a center for high technology start-ups and is a center of culture, music and art. The city’s vitality is driven by a spirit of independence rooted in its colonial past.
Philadelphia
Philadelphia has found its own identity despite being a neighbor of New York City. It continues to undergo a revitalization while blending a historical past with its spirit of independence. As America’s original capital, Philadelphia embraces its history while recognizing the need to adapt to change. It is home to the University of Pennsylvania and Drexel University. It sits midway between Washington, DC and Boston along Amtrak’s northeast corridor and is vital to the economic health of the northeast. Tourism is strong in the greater Philadelphia region.
