Forging New Links
Asian-American broke represents a shif in valley’s business property marketplace.
By Katherine Conrad, San Jose Mercury News, July 4, 2006
Commercial broker John Luk, the force behind San Jose’s Pacific Rim Shopping Center and the Bay Area’s largest Asian marketplace, Milpitas Square, now has a new focus: selling business space to the Asian community.
In a deal he struck with San Jose-based Borelli Investment, Borelli builds the office condominiums and Luk finds the buyers. They are chiefly Silicon Valley professionals who like doing business with people they know, who would rather own than rent their offices, and who tend to be Asian.
A Chinese-born American, Luk represents a shift in local commercial real estate, a lucrative business that still relies heavily on inside knowledge and trust. Brokers typically have been white.
Now that’s beginning to change, as Silicon Valley’s diverse entrepreneurs play a growing role in the office market. Developers who want to sell to small businesses need a conduit.
“We don’t speak the lingo,” said Borelli, who leads one of Silicon Valley’s oldest commercial real estate and development firms. “And we hope to sell the condominium units faster.”
Luk, who speaks Mandarin, is one of just a few Asian-Americans selling commercial real estate full time in Silicon Valley, others in the broker community said. He has been carving a niche for himself since he opened GD Commercial Real Estate in Milpitas three years ago.
It seems a likely endeavor for the man, who sees himself as a builder of bridges between cultures, communities and even continents. Asians believe strongly in property ownership and know how to pool their resources, he said, but they need a broker to help guide them through the process.
“We deal with every buyer,” he said. “The big boys don’t take time to respond to the small guys — we are the small guys.”
Though there are many Asian-Americans in the residential real estate industry, commercial real estate has attracted few Asians, said Olivia Jang of California Best Investment Realty in Cupertino.
“I know John Luk,” Jang said. “I know him, since in the Chinese community, there’s not so many commercial agents. There’s only him, me and a few ABCs — that’s what we call American-born Chinese — a few younger guys.”
Jang said the commercial side is a tough field to break into, especially if you don’t fit the stereotype.
“Most commercial agents are white males,” she said. “So for the Chinese, even the first generation born here, it’s not so easy to get into this field. Commercial real estate is hard, it’s more complicated and you need more knowledge.” For example, she said, there are no easily accessible listings for office properties, as there are for homes. Brokers have to rely on connections to get business.
Luk, who came to the United States in 1975 as a nurse, broke into the industry while caring for flower growers in the emergency room. Many could not speak English, so Luk was their interpreter.
He discovered that they needed help, first to negotiate better business deals for fertilizer and seed and then to sell their property, as their fields of flowers made way for development.
Three years ago, he decided to launch GD Commercial, where 15 brokers with roots in China, Vietnam and India work to serve Asian investors. Depending on Luk’s mood, the GD in the name either stands for global domain or good deal.
Luk expects the strategic alliance he has formed with Borelli Investment will take his firm to the next level. Luk is already marketing the commercial condos to the Asian-American community here. But his ambitions extend all the way to China, where he recently opened an office in the southern city of Guangzhou to encourage Chinese investors to buy a piece of America.
In the next few weeks, Luk said, 10 Chinese investors will tour Borelli’s condo projects in Ringwood Business Center and Junction Office Center.
The Borelli name ought to be fairly well-known among Asian-Americans, since two-thirds of his condo buyers are either Asian-born or of Asian ancestry, Borelli said. But now that interest rates are rising, leading to a slowdown in commercial condo sales, he is interested in finding new buyers for his product.
“There’s 1.3 billion people in mainland China and 1 billion people in India, and a big segment want to come to the United States,” Borelli said.
Under a program Congress established in 1990, called the EB-5 visa, an investor willing to invest $1 million and hire 10 employees in this country can get a green card after about a year.
“It is a lot of work to be the bridge,” Luk said. “But China is the largest-growing economy in the world. Why not have them come and do business in San Jose?”
Borelli, Luk said, does not know China, but he knows the Asians are valuable to his business.
Borelli isn’t the only one. Danny Yu, a commercial broker with NAI/BT Commercial, said he, Tenny Tsai and Jim Kovaleski, all BT brokers, went to China in November to check out investment opportunities.
“The economy in China is growing and a lot of individuals are making money,” said Yu, a broker since 1983. “They like to invest outside the country. There’s still a trust issue between them and their government. The rules are changing every day and they don’t know when the government will flip.”
As Luk said, “There’s a lot of millionaires in China and most of the billionaires are in their mid-30s and early 40s. The timing is getting closer and closer to encourage them to go out of their country and internationalize. This is the land of opportunities and the land of immigrants.”
Contact Katherine Conrad at firstname.lastname@example.org or (408) 920-5073.