Foreign Investment Rising for US Commercial Real Estate
Financial Times reports: Foreign capital has piled into big, multi-family apartment blocks and residential homes in the US in the past year as investors seek a global safe haven in increased American demand for rental property.
In absolute terms, the dollar volume of foreign purchases of multi-family property to September 2011 has exceeded 2010’s full-year total by 73 percent, according to data by global commercial property research firm Real Capital Analytics (RCA). Ben Thypin, director of market analysis at RCA, said he expected the year-on-year gain to be close to 100 per cent.
“Investors are seeking less risky assets whose value won’t be as volatile as many of the other investment opportunities available in this turbulent global economy,” said Mr Thypin.
Foreign investment represents 5.8 percent of all multi-family purchases, up from 3.7 percent in 2010, according to RCA. More statistics on the global market can be found in an article released on October 6, "Foreign Investment Continues to Grow" and more extensive data will be included in an upcoming publication "Global Capital Trends".
A weaker dollar, international market volatility and a continuing foreclosure crisis have combined to create an unlikely safe haven for international investors.
Foreign investors, who can include wealthy individuals as well as foreign pension funds, insurance companies, sovereign wealth funds and real-estate companies, have directly invested nearly $4.2bn in the US multi-family property market since the start of 2009, according to RCA data. Analysts say that the market share of such property owned by foreigners is significantly larger as the data does not include indirect investment through local intermediaries, which is difficult to track.
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Posted by: Nina Turner