Last week, we took a look as Teles President Peter Hernandez and a few other Teles agents weighed in on the Chinese economy. Their conversation ranged from an overview of the economy to what motivates buyers and developers to do business in the United States. The conversation was illuminating, producing insights into the current state of the market, and showcased the deep knowledge of the business that Teles brings to the table.
This week, Hernandez sat down for a wide ranging conversation with Realtor Mag. The same topic was explored, but the piece is a deeper dive into the factors driving foreign investment in the U.S. This time, Hernandez brings his extensive knowledge to bear on the “Chinese Beverly Hills,” his predictions for the future of the Chinese economy, and how realtors here at home can capitalize on the continuing boom – or coming bust.
First, Hernandez gave an overview of the state of the Chinese economy. While it’s true that the growth rate has slowed to 7 percent, it’s still outpaces the globes five other leading economies by two or even three times. Additionally, the Chinese are now exploring what used to be traditionally western ventures in particular, entertainment. Hernandez says that experts predict $8.2 billion in revenue from Chinese box offices in 2016 alone, so there’s plenty of liquid cash still in the mix.
“All we hear about is the gloom and doom of the stock market,” says Hernandez. “But China has fast become a country of opportunists no longer shy about integrating with the West. India did it long ago. So rather than seeing China heading for disaster, I view [the slowing of the growth rate to 7 percent] more like a restructuring — a market correction.”
Still, a slowdown in the economy is taking place, but that isn’t all bad. And in some cases it’s good for US housing markets. Chinese investors see American property as a safe place to put their money. That’s played out in an especially big way over the last year. “There’s no arguing the fact that Chinese buyers have been our biggest spenders, spending more than double two years ago,” Hernandez says. “Chinese purchases in overseas commercial real estate jumped 49 percent last year, according to Jones Lang LaSalle. China’s market woes have provided impetus for more Chinese to invest in the U.S. housing market.”
Hernandez has some insights into how Teles has tapped into that flow of cash. Like most everything else in professional life, the secret has been networking, though this time with a high tech twist.
“Teles has gained a competitive advantage in working with Chinese buyers, as well as international buyers,” says Hernandez. “And here’s how we did it: Our CEO and Chairman Peter Loewy…understood early on that international sales requires a personal and targeted approach. So he created a database of international relationships with advisers representing attorneys, business managers, architects, notaries, emissaries, and other professionals around the world who receive our property offerings, and they pass them along to their clients when relevant. Since curating this international gateway network and database, Teles Properties has facilitated more than $1 billion in listings and direct sales to overseas clients in just the last four years.”
So the tools are in place. But how does the individual agent make the most of working with overseas clients? Naturally, Hernandez has some insights into that as well. “Working with Chinese buyers requires a different mindset, such as taking into account cultural beliefs and traditions,” says Hernandez. “There are also common cultural practices one should observe in order to avoid situations that may cause a Chinese buyer to back out. In addition to understanding the principles and importance of feng shui, lucky numbers, auspicious dates and years, it is critical to understand rank, seniority, and Chinese attitudes regarding personal space.” Continues Hernandez, “Chinese people typically do not greet with a hug. They go out of their way to show respect to elders and avoid causing feelings of shame or embarrassment. In other words, they are tactful in declining an offer of any kind.”
Read the full article here for further insights from Hernandez that make full use of the Teles combination of intense knowledge, experience and expertise, both technical and personal.