MidEast Investors Eye US Commercial Property
The National (UAE) reports: Middle East investors were the largest cross-border buyers in US commercial property before the financial crisis hit but have largely stayed out of the market for two years.
International investors spent USD 2.2 billion (Dh 8.08 billion) in the US commercial property market in Q2, a 76% increase from Q1, according to Real Capital Analytics, which tracks commercial property transactions globally. Analysts said this growth would accelerate in the second half of 2010; however, transaction activity would be determined by sellers who had been reluctant to offer choice properties so far.
Major UAE investors such as the Abu Dhabi Investment Council (ADIC) put USD 5.9 billion into the US commercial property market in 2008, more than Europe, Asia and the Americas combined, according to Real Capital Analytics (RCA). This included the 2008 acquisition of the Chrysler Building in New York City by ADIC.
But the region’s investments dropped last year to just $100 million. Dubai’s financial troubles led its investors to stop stay out of the market for “trophy” properties and instead put money into REITs (real estate investment trusts) or private equity funds, according to observers.
Lately, commercial real estate buyers became more aggressive. One property of interest for Middle East investors could be the John Hancock Tower in Boston. The 95% stake in the tower on offer (which could be worth USD 1 billion) could be acquired by MidEast companies, according to Stephen Collins, a managing director at Jones Lang LaSalle.
High US taxes on foreign property investors have impeded investment. Only 5% of aggregate US commercial property purchases involve foreign capital compared with 50% in the UK, said Dan Fasulo, managing director at RCA in New York City.
View the full article on The National (UAE): MidEast Investors Eye US Commercial Property
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