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Publisher's Notes

Hallo Europe? Opportunity knocks for many Americans Henri Alster spoke a few words that U.S. real estate folks should remember: "European property markets are undergoing the most dramatic change ever in their history." He uttered this proclamation before a recent gathering of some 800 real estate professionals (including me) from various parts of the world who were attending an investment conference at the Louvre in Paris, France.

Why should we listen to Alster? After all, haven't Europeans been extolling the virtues of investment in their markets for several years now?

First, Alster has years of experience in both European and American real estate (he runs his own consulting firm, American European Inc., from New York and United Kingdom offices). And he was instrumental in organizing this recent conference, along with the Urban Land Institute (for more information about what happened in Paris, please turn to page 6).

Secondly, you must put Alster's comments in context with conditions and events that are now unfolding and shaping current-day Europe, events that may make it the Next Great Opportunity for American investors.

First and foremost, in my mind, is the formal creation of a single monetary entity called the European Monetary Union and with it a new unit of European currency called the Euro. The formal creation of this currency is only nine months away, on Jan. 1, 1999.

To be sure, there are a great many unanswered questions about the Euro's effectiveness in unifying what are quite disparate cultures, governments and tax systems. But nearly all observers agree that it could be the primary driver (finally) behind a veritable floodgate of potential U.S. investment in Europe's property markets.

Already, a few key U.S.-based players have emerged there, including Goldman Sachs, J.E. Robert, Lehman Brothers, Credit Suisse First Boston, Secured Capital Corp. and many, many others.

Nearly every New York-based U.S. investment bank has a major presence already in London, which itself claims the title of the world's third-largest financial center after New York and Tokyo.

How does the future really look, then, for Americans abroad? Consider that Sam Zell has already set up a European property fund to invest in the Continent. And Nomura has set up a new French operation being run by Joe Penner, Ethan's brother.

Already, a bevy of new Pan-European stock indexes are breaking cover, including new ones called Dow Jones Stoxx (tracking 660 companies), Dow Jones Stoxx 50, Dow Jones Euro Stoxx (tracking 326 companies) and Dow Jones Euro Stoxx 50. Each began tracking European companies and their performance on Feb. 26. And with the rest of New York's investment bankers so close by in the UK, is it a foregone conclusion that Europe is the next great market for Americans?

I think it is.

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