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Case Study : International Real Estate Investments

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Case Study 3 Rafael A Guzman Garmendia Webster University Orlando South FINC-5840 12/09/2014 Statement Of The Problem Equity International (EI) through its chief strategic officer Thomas McDonald is looking for new investment opportunities in Colombia, which has shown a tremendous economic improvement in the last 10 years. In general terms, EI has the expertise and know-how on international Real Estate investments but is not totally sure that right now is the best time to put capital on risk in that country, based on its previous negative experience on Venezuelan investment. Mr. Mcdonald 's has to answers the questions for the board of directors about taking the risk or not. Questions 1. Was it the right time to invest in …show more content…

2. Was the Colombian stock market strong enough to be considered a viable option for exit? Colombian Stock market is relatively small with US$ 209 billion market capitalization and only 19 companies trading in excess of US$ 1 million per day. Additionally, fears of a slowdown in China 's economy and the slow recovery in Europe have caused a sharp drop in the stock markets of the world. This situation has created a perception of increased risk globally, and therefore Colombia is no the exception. In this context an exit strategy must be estimated. 3. If economic trends, shifted, would oversupply become a problem in this concentrated market? Of course It can represent a threat but at this point in Colombia, more specifically in Bogotá, there are not enough spaces class A, with high specification that are the most demanding for large local and multinational companies, becoming in a excellent opportunity for EI. 4. What aspects of the partnership with Terranum Corporate Properties should El be concerned about? Compared with the option of get into Colombian markets in solo mode, the domain and knowledge of Terranum can be an advantage for the partnership in terms of improved outcomes for EI. However, EI should include the drafting of an agreement that

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