US REAL ESTATE REMAINS TOP DRAW FOR FOREIGN INVESTORS

By: Taro Chellaram /Commercial Real Estate/Mar 02, 2019

US REAL ESTATE REMAINS TOP DRAW FOR FOREIGN INVESTORS

The US continues to be the world's leading recipient of cross-border capital, and it has no plans of slowing down. During the first half of 2017 the United States attracted 19.8 billion U.S dollars from foreign investors.

 

The U.S has a market appeal that is unmatched by competitors, so we can expect that China and other developed countries will continue to drive this trend as they seek to invest in U.S. metropolitan's that are less volatile and offer greater risk-reward profiles compared to their domestic markets.

 

For offshore investors, U.S. real estate offers manifold attractions. Market sentiment and liquidity remain elevated, an extensive range of assets exists, and there is an active, engaged and diverse investor pool.

 

So, what can we expect in coming months? 

 

Foreign investment will rise

Real estate in America is both attractive and valuable to foreign investors. This, plus changes in the 1980 Foreign Investment in Real Property Tax Act allow foreign investors to be treated similar to U.S counterparts in real estate investment trusts.

 

Portfolios will become diversified

While office space is the primary purchase for foreign investors, access was listed as the greatest deterrent for investors according to a report from CRBE Capital watch, who reported 1 in 4 investors listed access as the main obstacle in U.S investments. A problem that is likely to change with the onset of online investing sites; now, global investors can gain more insight on market trends and available properties.

 

U.S Metropolitan's will be a main attraction for Global Investors

According to the Realtors association, the top five markets that foreign buyers are searching for are Miami; Los Angeles; Bellingham, Washington; Kahului-Wailuku-Lahaina, Hawaii and New York City. All of those markets reported being hot spots for Chinese buyers in 2016. As of March 2017 though, China wasn't even in the top 5 countries searching these locations, the publication says.

 

Office Space is a Major Pull

Seems that office space continues to be the most invested commercial property to date. 10.6 billion dollars of foreign capital was invested int the U. S office sector. This is a reflection of 80% of all office investments from China, Singapore, Canada, Germany and Japan.



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