The Signature in Real Estate

Over the years, I have rolled my eyes when I have received emails with huge signature taglines and have kept my thoughts to myself.   However, this evening, as I was cleaning out my “inbox” in Outlook, I noticed that the majority of the huge mail items were from real estate agents –mainly, because their “signature” attachments are so large.  

When did the “signature” become more important than the message?

Example 1:  An agent sent a one sentence message to me that was “26KB” because his signature line was 4 inches –I am not exaggerating. A signature that included:  his name, his personal logo, his official title,  his contact info, all of his awards, his broker’s logo, a movie attachment (about himself), a link to “his properties” and a “think green logo”.  (I refrain from commenting on the “green” aspect of such a signature!!)

He is not alone in this tacky display of inconsideration that is interpreted by many (in the profession) as someone that is a genius to “Branding” and to others as rude…

Example 2: Another agent had a similar signature, but, with a few more additions: follow me on twitter (link); following me on Facebook (link).

I thought to myself:   “Are you kidding me? How are you taking care of your clients with all of this self- branding via social media? Do people really care that you showed an apartment and then went to Pastis — is this why you never submitted my offer?” 

When did the “Brand” replace the “product”?  When did the “product” become the agent (broker) and not the apartment (and client)?

A Greenwich Village Soliloquy

In the past I have made an effort not to be biased in my writings of neighborhoods within this island called Manhattan; but, this evening I have decided that my romance with Greenwich Village needs to be voiced on this page.

It has been said that, “the Village is the most significant square mile in American cultural history”.

I must admit, that it definitely has made a significant impression on me: from my pre-teen years in a small college town in Ohio that leads to my passion as a professional in this city today. 

Proustian memory took its hold on me as I walked through the Village today…

Flash to 12 years old:  In my hometown of Wooster, Ohio I was learning a piece of music, “Still on this Shining Night” by Samuel Barber. The lyrics to the piece haunted me and I needed to find out more about this James Agee that inked them. So, I  fiercely studied Agee’s “Descriptions of Elysium” and other parts of Permit Me Voyage. I became slightly obsessed with Agee from that age of twelve. Because of my obsession with his writings, he introduced me to the photographer, Walker Evans in his book Let Us Now Praise Famous Men. Both Agee & Evans were residents of Greenwich Village.

Reflection to Teen Years: Still in Wooster, I would take escape from the mundane rural life and visit my public library. I would sit for hours and devour huge art books working my way up to 20th century masters including on again off again Village residents as Winslow Homer, Diego Rivera and John LaFarge. Not knowing then that other residents such as Man Ray would peak my interests so many years later.  And that abstract expressionism, which found its tone in Greenwich Village would be a style that I would want to learn more about now in my thirties.

Spell of 18 years old:  In Cleveland, I found myself massively in-love for the first time. My first love introduced me to the works of Jackson Pollock. Pollock lived at 46 Carmine, 47 Horatio, 46 East 8th in the Village.  I in turn introduced my first love to my fascination with the writings of Henry Miller—a resident as well. And then, heart-break entered my world. During the laments of such agony with my once (naively) betrothed, I read Kahlil Gibran’s, The Prophet. I am reminded of my first engagement with heart-break every time I pass, 51 West 10th Street – where Gibran lived.

Of course there are so many “Great Minds of the Village” that influenced me over the next twenty years -including important social movements. But, today was just a quick flash to my youth, reminding me, I have always had a connection to this neighborhood. It started in Greenwich Village for me–even though I had never been.  

I  desire to make my own imprint on the Village one day. Maybe, a real estate legacy of some sort…

 

Celebrate the Village in 2009:

Summer events sponsored by the Greenwich Village Society for Historic Preservation

Beyond the Beatniks: The Hidden History of St. Mark’s Place
A Walking Tour with Eric Ferrara
Sunday, July 12
1:00 – 2:30 P.M.
Meeting place given upon reservation.
Free; reservations required.
RSVP to rsvp@gvshp.org or (212) 475-9585 ext. 35

St. Mark’s Place staked its claim as an epicenter of pioneering radical arts, activism, and counterculture in America over half a century ago — but there is much more than meets the eye. Before the beatniks, hippies, and punks (and way before the t-shirt and yogurt shops), St. Mark’s Place served as an important social and political hub for the ever changing immigrant groups populating the neighborhood over the last 150 years.

On this tour, we will peel back the layers of myths, legends, and misconceptions of St. Mark’s Place to reveal little-known history about this fascinating street and time capsule of East Village/Lower East Side/New York City history.

Eric Ferrara is a fourth generation/native Lower East Sider, published author, licensed guide, and executive director of the East Village History Project and East Village Visitors Center. Ferrara offers years of unprecedented research along with personal anecdotes and oral history which make for a truly unique experience.

This event is co-sponsored by the East Village History Project/East Village Visitors Center.

An Evening at the Jefferson Market Garden
Featuring the cast of the Greenwich Village Follies
Tuesday, July 28
[Rain date: July 30]
6:00 – 8:00 P.M.
Jefferson Market Garden
Enter on Greenwich Avenue at Sixth Avenue and West 10th Street
Free; reservations required.
RSVP to rsvp@gvshp.org or (212) 475-9585 ext. 35

The Village on Film Presents: Wait Until Dark
A GVSHP Film Series
Thursday, August 6
6:30 – 9:00 P.M.
Neighborhood Preservation Center
232 East 11th Street
Free; reservations required.
RSVP to rsvp@gvshp.org or (212) 475-9585 ext. 35

Following our May screening of Next Stop, Greenwich Village, GVSHP presents Part Two of our Village on Film Series.

Come see Audrey Hepburn’s Oscar-nominated performance in Terence Young’s Wait Until Dark. Hepburn plays a recently-blinded woman who lives on St. Luke’s Place. After her husband agrees to carry a doll over the border for a stranger, Hepburn’s Susy Hendrix is then terrorized by three criminals (led by Alan Arkin as Roat) who believe that their large stash of stolen heroin is inside the doll. The search begins benignly but turns violent as Susy catches on to the thieves’ plot and forms a plan of her own to level the playing field.

This film screening will be held in GVSHP’s living room with popcorn and goodies provided! Space is limited.

The Villagers of Ellis Island
A Walking Tour of Ellis Island with Tom Bernardin
Sunday, August 16
Meet at 11:45 A.M.
Meeting place given upon reservation
$12/person for ferry fees.
RSVP to rsvp@gvshp.org or (212) 475-9585 ext. 35

Greenwich Village has often been celebrated for its rich immigrant past, including the South Village’s Italian community, the groups of French immigrants living on Bleecker Street in the nineteenth-century, and the Ukrainian heritage of the East Village. But how did these future Villagers enter our country? In many cases, they came through Ellis Island, the long-acknowledged immigration hub of the United States.

Join Tom Bernardin, former National Park Service Ellis Island ranger at pre-restoration Ellis Island and author/publisher of The Ellis Island Immigrant Cookbook as we explore Ellis Island and its connection to Greenwich Village immigrant groups. This program will provide an entire day’s jaunt out to Ellis Island, including a tour of the island exclusively for GVSHP followed by individual opportunities to explore the Island.

Dominos in Real Estate

 

Believe it or not,  I have not had a buyer purchase with a mortgage since 2006. This being stated, prior to that magical year I have been involved with hundreds of transactions that involved financing for properties – even those that were foreclosures and short sales. The later being the most difficult of experiences (on the agent side and the appraiser side).

I am embarrassed to write that I missed a very, VERY important ruling (in red below) that was put in motion by Fannie Mae on March 1:

“The government-backed mortgage-finance company stopped guaranteeing mortgages in condo buildings where fewer than 70% of the units have been sold, up from 51%. In addition, the company won’t back loans for sales in buildings where 15% of current owners are delinquent on association fees or where more than 10% of units are owned by a single-entity.”

 

Those words in red affect every condo buyer I have ever represented –even the cash buyers. 

Three days and 2 sleep deprived nights ago, I received a call from an owner I sold to in 2007 (cash purchase)…. 

 

Because of the current low interest rates, the owners thought they would take a mortgage on the 2007 unit and purchase another unit in NYC because the prices are pretty good right now.

 

Their phone call was to inform me that the lender would not lend on their unit because “one entity” owned 18.14% of the units in the building and there are too many rentals in the building. The subject building had been put on the “list” of buildings not to lend to —- the owners were not happy and wanted to back out of the other deal because of the “principle” of it all –NOT because they did not necessarily have the cash to follow-through on the new apartment.

I have to say, I understood their perspective. Most of us feel that if you dump cash into real estate you are going to be able to draw on it in the future – right? Not the case anymore…it is a new time in the United States with a lot of change that concerns all of us on some level.

 

I was told by executive leaders in the NYC real estate community, multiple loan officers and other highly experienced brokers: “it is what it is-nothing can be done.”

 

Guess what? I said, No, it cannot be and I started getting to work. I am not going to get into all of the tedious things I had to do or all of the individuals I had to “push” to help me retrieve the info I needed; but, I got the building off the “list”.  

 

My entire life I have had (some) issues with simply not accepting: “it is just the way it is – let is rest.” At times it has been my demise…

I do not know why I am so compelled to say “No, there must be a way.” I guess if I have not had some success with converting the “nothing can be done” to something has been done (but, differently), I would not be the fighter that I am. The “believer” that everything IS possible…

Maybe, we are so accepting of the “nothing can be done” mentality because we are not ready to see that it CAN be done.

 

 

Dominos may fall; but, the real game does get started until they are down.

“What is Your Personal Stimulus Plan?”

This late afternoon I took acute notice to a proposed question:

“What is your personal Stimulus Plan*?”.

I smiled as a response.

For the simple reason, that I have always believed that I am the mastermind behind all of my success and malfunctions on this journey called, life. I did not have to wait for a recession to re-evaluate my circumstances; I do not cast blame on others or even desire the government to offer Kensyian-like means to bail me out.

I indeed have a personal Stimulus Plan: written in the form of goals with deadlines. I simply call it, my Life Plan. It is by no means a masterful entrepreneurial manual wrapped with the fiscal prophecy of quick success; but one swathed with small goals quilted with even larger goals that will take many, many years to achieve. With the thread being all of my personal values.

Peculiar it is to me that individuals wait for others to determine their fate. Currently, I am surrounded by a chorus of citizens singing the parts of real estate buyers that are waiting for the market to fall further. I must say, it is time for this Requiem to fade…it is time to step up to the stage and be a soloist.

Housing prices will fall further; but, at the bottom there will be a new found fear…panic to buy. Once the economists with the media announce the “bottom is here” or even the real estate market is picking up the beat: all of self professed “bottom feeders” are going to rise to the surface and the bidding wars will begin (again). Many of the choristers will miss the opportunity of that “great deal”. The time to find that deal is now; in the art form of diva-like negotiation; but, with reasoning– by that soloist buyer. That buyer that knows the real fiscal return in the purchase arrives at their doorstep in many years.

One of my goals in my Life Plan: I will have a MIT and Harvard education saved for each of my children by the time I am 44 (the age they will be in college). Many of my friends ask, “How are you going to accomplish this as a single mother in less than a decade and as a broker??!”.

I always answer: “I am buying a studio apartment in Manhattan in 2009; two in 2010; etc. Then I will sell the first after owning 8 years (and so on), pay for their education (in full) and finally, buy my own personal residence that also will be large enough to fill all of my cherished books!”

As a first generation American (maternal side), I am a witness that owning real estate builds wealth. My grandparents’ case: owning 38 pieces of real estate…slowly, as if sewing a beautiful quilt full of will and prosperity..

Maybe, it is one reason I am drawn to downtown Manhattan…the view of Ellis Island is a remembrance of the near penniless arrival of my grandmother holding my mother as they entered America…

I am not writing this night as a helpless artist painting with words; but, as a real estate advisor with a conviction that this time of fear shall pass, bringing a resurrection of affluence to those that choose to act now. 

 

 

 

 

“A pessimist sees the difficulty in every opportunity. An optimist sees the opportunity in every difficulty” - Winston Churchill 

*Question from Wells Fargo’s Seminar: Meeting The Market Challenge in 2009

Perspective in Balance

With effort to heal the disappointments of this week, I poured a glass of wine and filled my apartment with notes of the Bach Cello Suites this night. As Yo-Yo Ma’s interpretation soared through my apartment, I savored the perfect balance of Bach while reflecting on the potpourri of clients in my pipeline: their own personal “story” to purchase in Manhattan and a conversation with one client in particular, “The Artist.”

 

Everyone in NYC real estate talks and writes about the big dollar apartments (and buyers). I have too on occasion.  I guess it is sexier to talk about. It sells newspapers. It gives some a “hope” of what they may one day own and offers bitter fuel for those souls that find envy in others’ prosperity.

 

My client, “The Artist” is not going to sell newspapers with her purchase nor will she be the talk of Manhattan cocktail conversation. But, she does put a real crescendo on PERSPECTIVE.

 

The tête-à-tête on the corner of 69^th & Amsterdam

 

Setting the stage: The Artist is going into contract on an apartment and before she signed the contract, she wanted to look at one more apartment to validate her decision to move forward.

 

The Artist: Heather, I am sorry you had to show this apartment to me.

Heather: Are you kidding me? $240,000.00 is a lot of money. I get it – you need comfort of mind in your purchase. I find it odd that people here still think it is an insignificant amount of money. In most cities, a family of four could live on that amount comfortably for 5 years.

The Artist: Yes, I guess so; (she laughs) or buy a really great house in Poughkeepsie!

 

Perspective:

When you get right down to the matter of it, $240,000.00 is a lot of money for 450 square feet of space wrapped with northern light in America…

Balance:

Not too many buyers are finding apartments in Manhattan (with a fulltime doorman) for $240,000.00…

The Sentimental Broker

A client in Belgium (whom is a New Yorker at heart!) emailed me this summer asking: “Is Manhattan still your secret lover?”

So, on this chilly winter day, I have decided not to have words that fill this page with housing data and market reports. But, to write about my “secret lover.”

This past Saturday I experienced an uncomfortable coffee klatsch with a French man. He was complaining about New York, its residents and the lack of beautiful architecture.

In a passionate effort to spin his thoughts in a different direction, I voiced my love affair with New York as an historic aria:

“Manhattan has such a rich history that we all add to with chapters of our own lives. I am excited and thankful everyday that I am here!

How could you not appreciate that Bernstein lived in The Osborne, F.Scott Fitzgerald wrote at a pub in the West Village, Toscanini & Babe Ruth stayed at The Ansonia, George Washington celebrated his faith at St. Paul’s Chapel, William S. Burroughs wrote at the Chelsea Hotel, and all of those that came here with nothing but a dream and turned it into a wonderful tale of will?”

His response: “I could care less about the history -this city is nothing special.”

This was the end of our time together. Unfortunately, I have read many similar sentiments over the past weeks regarding NYC and why would anyone want to live here – mainly because housing is so expensive. My own family questions why I gave up a comfortable lifestyle in the mid-west to work in New York and do not understand that this city is a symphonic masterpiece for me.

In the tradition of an apprentice craving information, I devour books and periodicals resounding the history of the buildings and people that surround the green of Central Park all the way south to Wall Street. I embrace every opportunity that is offered here involving the arts, lectures on the economy, and individuals that spark my mind.

Manhattan for me is a Mecca of chaotic energy, a celebration of diversity with history and hosts exquisite architecture that fuels my obsession to be better: professionally, intellectually and spiritually.

So, there you have it. I have finally found true love in the form of an island and continue to romance it as if each day was my swan song…

 

 

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Crusading Economic Woes with Kindness

For months I have been thinking, reading and witnessing the economic disfigurement we are currently encompassed by. I am tired of cocktail hour conversations echoing the same chords of “it is bad out there” and it is “going to get worse”. I believe the majority of us saw this coming in 2006 —and turned a cheek. It is time to come full face…basically, I am tired of words.

I do not necessarily agree with one entity, such as a government saving or “bailing-out” individuals or corporations in a recession. I have no answers, I have no BIG miracle plan, but I do believe all things happen to us for a reason and I will not wait for an organization to fix this mess. I choose to act now.

True leadership starts at an ordinary level: with all of us as individuals knowing that no one is beneath us (while aiding others).

What ever happened to being just kind and thoughtful to one another? What happened to helping someone we do not know and wanting nothing in return? I have always been thoughtful and helped those I encounter every day. Mainly, because I have been at the very bottom before (actually, a few times — covered with mud bordering on clay) and I never want anyone to be there.

Many people help by contributing to a non-profit organization and feel that this is good enough for the year…which is fine. But, what about contributing to man on a daily or weekly basis throughout the year with thoughtful action?

I find great joy in buying a complete stranger a cup of coffee, tipping the cab driver double, offering that rushed individual my metro card so they can catch their train and when someone asks for directions not telling them where to go; but actually escorting them to their destination – what’s a few blocks?

Around Thanksgiving, I was in Cleveland for the longest I have ever been since I moved to NYC. I usually fly in and fly right back out.

However, this Thanksgiving I spent a little over a week in this city, I used to call home. As I drove (for the first time in years) down Interstate 71 and through the suburban neighborhoods, I became sad because of the lack of energy, the lack of “pride of ownership” that used to grace grand streets I used to travel — the city is bordering on a complete economic disaster…even though I am not a wealthy individual (not even close to it!), I wondered what I could do to help. In turn, I found myself being especially kind to everyone I encountered. When I went out with my sisters and bought a round a drinks for their friends for $33.00 (that was for only 8 drinks!), I tipped the bartender $10.00. Everyone around just stopped talking and looked at me. My 24 year-old sister said “Heather, why are you throwing your money away like that? This is not New York!!” I replied, “I know, but, eight drinks in NYC would cost me at least $100 and I appreciate that tonight I can make you, your friends and the bartender happy. Not too mention that we all should try to make a difference right now -even if it is a small one. It is time to pay it forward.”

Once back in NYC, I noticed that I was buying a lot of coffee for others, tipping more and smiling more…

The other night as I was finishing the final pages of “Blue Blood & Mutiny: The Fight for the Soul of Morgan Stanley”, I decided to order take out. Once my delivery man arrived he told me my total was $11.00. I gave him a $20 and asked for $3 back. He was so flustered that he gave me $6 back and I said “No, here” and gave him the additional $3. His face was so mystified and said, “I am used to getting $1″…and as he thanked me, I thought “what is going on here…what have we become? We are in a recession and people are using it as an excuse?” I just do not get it.

If I cannot take care of the tip for a server/cab driver, etc — I just walk or do not go out.

I could never eat food and not take care of the individual that brought it to me. I make the sacrifices in other parts of my life so that I can take care of others — in “small” ways.

These are not examples of me being a “big tipper”; but trying to do my part…

You know, we cannot blame our problems on so called “greedy” bankers on Wall Street when we all are “greedy” on some level…

Yes, I know my reasoning is slightly idealistic; but, so what?

I am a firm believer that small acts of kindness can change a world, enhance creativity and stimulate the good in all of us — even those perceived as bad…

Hoping that others can cast their spell of kindness on this period of blight so it is more endurable for all…

May 2009 bless us all with thought, humility, health, kindness and strength to do the right thing!

A Detour: TRUMP & ELIZABETH I

 

 

I sat at my laptop this evening with the intention of writing about the how the current economy and housing market influence corporate relocation this 2008.

However, my mind took a detour to the root of our pecuniary difficulties: MAN (and leadership).

This afternoon, I was with a client that relocated to New York via London with his firm. After, we looked at eight buildings during the London-like weather, I needed to stop for a quick pick me up at Starbucks. As I entered Starbucks, I noticed a building that was not on my itinerary – actually, I have never even been in the building before. So, I asked my client if he wanted to pop inside – he did. I must say the building was glorious; but, the unit was above his initial price-point and of course, he LOVED it. Post our viewing we stood in the misty light rain near City Hall to discuss all of the apartments we viewed and he was stuck on the last unit. As I drank the last bit of coffee, I voiced my sincere concern that if he chose the last unit he would not truly enjoy his New York experience because he would be taking funds from his daily “social” budget to enhance his monthly housing budget. This being said, he told me he “should” be ok…we got on the “R” train bound for uptown.

As I got off the train at 14th street, I thought about him; the “glorious” apartment and then had a quick flash to a conversation I had a month ago with a loan officer over a few Coronas.

The loan officer told me I was a bit “green” when it came to my clients and I offer too many favors. He told me that I go out of my way with them and should not worry about certain things like personal affordability, etc. Additionally, he was shocked that I have helped some individuals without a fee. Maybe, he was shocked because I am a single mother raising two children alone while working in the most expensive city in the US and could not comprehend my reasoning…He told me I was never going to be Trump. I responded by saying: “Actually, I am more impressed with the leadership and successes of Elizabeth I, Winston Churchill and Sydney Weinberg .” He was puzzled by why I did not strive to be like Trump and shook his head and said, “naive“…

Regardless of his reactions, I did not like the way he was advising me on how to perform my business or for that matter, how to make money. I explained to this loan officer that I am in this business for long-term relationships -not the quick return. So what, if I help someone and do not make a couple thousand dollars – I do the right thing and people trust me. Most importantly, I go home to my children at night with a smile that symbolizes that I am proud of my day with the comfort of knowing that I made a “small” difference in someone’s life.

As my mind was balancing these two events while briskly walking down 14th, I glanced over at a news stand. Headlines of Lehman’s fall; Hank Paulson wants your money; McCain has no plan to save us; America has poor leadership and so much more washed the front of the stand.

Quite honestly, I am tired and disappointed in it all. So many have self-indulged in their authority of leadership while not making the smallest investment of thought to the forthcoming outcome. I am tired of real estate professionals blaming bankers because their clients cannot get financing. Yet, the real estate agents are the same individuals that put their clients in over-priced homes with “creative” financing—Spinning this viscous circle everyone of us is enclosed by. As a public, we all aided in this state of economic chaos; as individuals we need to stop acting helpless.

Leadership is not just reserved for those that are in high levels within a business organization or in politics. Leadership starts at the bottom. As a real estate broker with no actual authority within an organization, I am at the bottom.

I choose to not make a quick profit for the sacrifice of another, I choose to stay true to my principles, I choose to take responsibility…

In closing, each summer, I work with many recent college graduates that are going into the finance industry. I always walk by Delmonicos with them and mention that it is the setting for the “power lunch” scene in the movie Wall Street. Believe it or not, they all say “great movie!” I love to ask them: “Are you more like Gordon Gekko or Bud Fox?” The few that respond: “Bud Fox” always put a smile on my face…

 

 

 

 

 

 

 

 

 

 

 

 

 

GREATNESS IS NOT RESERVED FOR THE GREAT. THE GREAT ARE SIMPLY THOSE WHO HAVE RISEN TO MEET THEIR DESTINY…Michael Berg

Fuel in NYC to Real Estate in Saudi Arabia

Years ago when I was a sales agent (in another city)I used to drive my clients to view properties in my car.  Well, until they realized that I was an awful driver – and decided to follow me in their own vehicles! One thing I have not missed being a Broker in NYC – I do not need a car.  If I need a car, I hire a driver.   

This week, was a week that I needed a driver for my clients.  On the way to pick up my clients, the driver was complaining about current gas prices.  I know gas is roughly, $4 a gallon, but never really thought about filling up the tank.  In a moment of lightheartedness, I mentioned that he should fill-up in Venezuela next time (he did not get my joke).  When he said it cost him $85 that morning for his Towncar – I was shocked and even more so, did not miss the responsibility of owning a car.

Which fueled my mind in another direction: real estate in the Middle East – Saudi Arabia.

According to a recent report of the Council of Saudi Chambers, investments in the Saudi real estate sector are set to grow at the rate of 2.9 percent in view of the fast population growth in the Kingdom. The real estate industry will achieve 6.7 percent growth over the next five years thanks to commercial and residential projects in addition to the demand for land and houses.

 

Recent article (something to ponder as you are filling up at your local gas station):

 

Saudi Arabia: Climate For Change

Real Estate Sector Set to Transform Kingdom

 

Saudi developers are seeking foreign partners and expertise to meet the king’s demand for thousands of new homes for his people

Saudi Arabia may have plenty of oil and a great deal of space, but, remarkably, it has a shortage of housing.

The government estimates that more than 500,000 people require new homes annually, equivalent to about 100,000 units a year. To meet the need, scores of house building projects are rolling off the architectural drawing boards, and the property business is booming.

In the last three years, 50 new real estate developers have received licenses from the Saudi Arabian General Investment Authority and regional property firms are entering the market that, until now, has been mostly centered in Riyadh.

Many of the new developments are spectacular mega-projects. The $26.6 billion King Abdullah Economic City, which is being built on the Red Sea coast north of Jeddah, will have three luxury residential districts that will house 75,000 residents.

A second project, Jeddah Hills, which is to be built in Jeddah at a cost of $11.2 billion, will consist of 20,000 top range residential units.

Al Oula Development Company, operating under the umbrella of Emaar Middle East, is responsible for building the properties on almost half of the 5,432 acre site. Ayedh Bin Farhan Al-Gahtani, president of Al Oula, says it will be developed in phases and will be the single biggest residential building project in Jeddah.

Al Oula has projects in all the kingdom’s major cities, says Al-Gahtani, who believes that the real estate business in the kingdom is just starting and the potential for development is great, due to an alarming shortage of home ownership properties in the kingdom. He expects to see many more such developments and says that Al Oula will take the biggest share in the market in developing residential units.

Saudi Arabia lagged behind its Gulf neighbors in liberalizing its real estate sector. As a consequence, the kingdom’s property development companies, while posting impressive profits, have not so far experienced the hyper-growth that has been achieved in other Gulf states.

Many of the larger Saudi firms have actually made some of their largest investments outside of the kingdom. Al Oula is in Egypt developing a new diplomatic quarter in Cairo. The project has been embraced by the Egyptian government and a number of embassies and additionally Al Oula is focusing on Syria and Jordan.

Many of the larger Saudi firms have targeted the United Arab Emirates, lured by a more open market and higher returns.

Al Hanoo, one of the kingdom’s leading real estate developers, formed a $136.2 million company called Ewan to build and sell the first phase of Star Islands, the largest commercial, residential and tourism development project in the emirate of Sharjah. Another major Saudi company, Tanmiyat, acquired the residential and commercial components of Legends, a $2 million theme park and resort development in Dubai.

Nevertheless the real estate business in the kingdom is gathering pace. High oil prices are leading to increasing personal prosperity for many Saudi citizens and a great deal of liquidity.

With a population of 27 million to cater for, the kingdom certainly has a much larger real estate sector than the other Gulf states, and so has potential for far greater returns on investment.

Economic expansion has also increased the need for accommodation as expatriates arrive in the established industrial centers of Yanbu and Jubail and the newer sites growing at Rabigh and Ha’il.

Dr Saleh Al Habib, executive director of Jiwar, a leading real estate company, points out that 60 percent of Saudi citizens do not own a house.

“They may not own a house, but the money is there to do so,” he says. Furthermore, with an estimated 60 percent of those citizens aged under 25 and the population growing at the rate of 7 percent a year, the demand for new homes is rising fast.

Al Gahtani of Al Oula maintains that it would be no exaggeration to say that the real estate sector in Saudi Arabia is second only to oil in terms of its economic contribution.

Saudi Arabia is underdeveloped in real estate terms, he says. This is due to political and financial elements. Banks have been traditionally cautious about engaging in real estate development projects because of regulations that did not allow them to mortgage the properties. This meant that developers had to raise their own financing, usually through private initiatives.

“Now things are changing on both the political and financial sides,” says Ibrahim Bin Fahad Al Assaf, Al Oula’s executive vice-president. “Banks are starting to realize the importance of real estate development. In the past, they were running away from these projects, and today they are running to them. Mortgage regulations are in the process of being approved by the government. We expect these to be realized before the end of the year. This will set the groundwork for a mortgage system in the kingdom.”

Expatriates – from other Arab states, the West and the Indian subcontinent – who have lived in the country for ten years continuously can now apply for citizenship, and thus qualify to buy property.

The lack of mortgage facilities has acted as a bottle-neck limiting development, says Al Assaf, and when this problem has been resolved he believes the market will expand quickly with developers selling on a mass level. “We are moving slowly but surely. In Saudi Arabia drastic change does not happen easily but we are continuously changing.”

The company president, Al-Gahtani sees himself as a tool, carrying out King Abdullah’s vision of the kingdom’s future, and believes that Al Oula will expand to five times its present size in the years to come.

He says the changes since King Abdullah’s accession have been dramatic. “He has challenged Saudis to repatriate their money and has made the kingdom a welcoming environment for investment.”

It was this attitude that persuaded the Dubai-based Emaar Properties to enter the Saudi market. In June, Emaar, the largest listed company in the United Arab Emirates, bought John Laing Homes, the second-largest privately held U.S. homebuilder, for $1.05 billion cash, making it one of the world’s largest property companies in terms of capital.

When it entered the Saudi market, Emaar linked up with Al Oula.

This, says Al-Gahtani, is because the two companies share a common vision and a common structure. He explains that Al Oula was the first company in Saudi Arabia to be established by a group of companies, rather than by an individual or a family and therefore is an institution not a family business or any one individual’s dream.

To emphasize the real estate potential in the kingdom, Al-Gahtani says: “Emaar has completed some incredible projects in Dubai, but Dubai is only the size of one Saudi city. Saudi Arabia will require probably 20 more projects equal to what is the biggest at present, the King Abdullah Economic City, to meet our society’s needs. So there is room for more entrants in this market.”

Al Habib of Jiwar has a similar enthusiasm for an international partnership. Jiwar is a subsidiary of the Saudi Binladen Group, the kingdom’s biggest construction company. Launching Jiwar after four years as a professor specializing in media and marketing, he saw that the kingdom’s real estate sector lacked feasibility studies.

“An important aspect of real estate that was missing was identifying the needs of the people. You have to know what they want in their homes, what they want in their malls, what services they require. This information was not present. So we obtained it. We do our studies, take the numbers and implement them into the design of our projects.”

What the kingdom needs now, he says, is more foreign expertise.

“We need companies with the sort of experience that leading American companies have,” he says. “Our plan for Jiwar is to get our name out into the public arena and attract some partners.

To build the Jiwar brand name, the company invested $13.3 million in sponsoring The World Cup soccer competition and has hired a leading international advertising agency to market its name globally.

“This is the time when we need the American companies and businessmen to come and help us with their knowledge and expertise,” he says. “We have the cash, but we need help to cope with the change, the booming population, the heavy liquidity and the mega-projects.”

Investors in real estate can expect returns of not less than 30 percent, he says, with no taxes and an open environment.