LOS ANGELES, 25 April 2006 — A top American real estate fund manager will be visiting Saudi Arabia from April 29 through May 9 to explore retail projects in the Kingdom.
“The combination of abundant liquidity owing to high oil prices and a youthful population creates significant opportunities for retail growth in Saudi Arabia,” Dr. Aria Mehrabi, co-founder of Los Angeles-based Pacific Star Capital Management, told Arab News.
Dr. Mehrabi is scheduled to explore projects in Riyadh, where he sees the most growth potential. “Riyadh will likely emerge as the first mega-city in the Gulf region,” he told Arab News. “In terms of population, demographics, size, and economic dynamism, Riyadh offers many attractions to a retail and residential investor. I’m very bullish on Riyadh.”
He said that most American investors had yet to look beyond Dubai to see the tremendous opportunities in the GCC states, most notably Saudi Arabia. “Too much of American investment thinking relies on the distorted image of the Middle East perpetrated by the media. Few realize the growing sophistication of the private sector all across the region and the opportunities available in the rapidly changing Middle East — and not just in real estate,” he said.
Before venturing into the world of real estate, Dr. Mehrabi earned his Ph.D. in international relations at the prestigious Johns Hopkins University School of Advanced International Studies in Washington D.C. Right now, his firm mostly invests in the United States, but in the past year they have sought global investments and recently placed offers on mixed use projects in Mexico, Argentina and Spain.
Dr. Mehrabi’s partners at Pacific Star Capital, Ethan Penner and David Walker, are renowned real estate players in the United States. Penner permanently re-defined the business of real estate finance by pioneering the introduction and application of securitization technology to the business. The National Real Estate Investor recognized Penner as one of the 20th century’s 100 icons of the US real estate industry.
Dr. Mehrabi feels that more Arab investors should look at opportunities in the United States. After 9/11 and the subsequent Arab-bashing that took place in American media and government circles, Arab investment in the US has dropped significantly. The recent cancellation of the Dubai Ports World deal in the United States amid US Congressional hysteria against it also soured Arab investors. But Dr. Mehrabi says opportunities abound in America, and Arab investors should seize them. “The US office and retail market affords abundant opportunities for the international investor. Though America may not be ‘fashionable’ anymore in the Middle East with people flocking to Dubai and Malaysia and China, no serious real estate player can ignore the vast potential of the American market.”
“International investors looking at the US market should consider a diversified portfolio of commercial properties,” he said. “Right now, the residential sector is overheated. There are signs that it is slowing down, but office and retail continue to grow, offering consistent returns above 10 percent. Our own firm has consistently achieved 8 to 14 percent returns a year,” he said. Dr. Mehrabi said he particularly liked prospects in the southwest, the Midwest, and the Sun Belt southern states stretching from Florida to Texas.
