RCA in the commercial property press:

Canadian Buyers on US Real Estate Shopping Spree

Market Watch reports: Lawrence Yun, chief economist at the National Association of Realtors (NAR), says about 27,000 Canadians bought vacation homes in the U.S. last year, and that it looks like the Canadian influx is slated to continue through 2010.

Experts expect the currency known as the loonie to continue to appreciate over the next several months, sending Canadian buyers on a shopping spree in Florida, California and Arizona.

While Canadians may be dominating the American residential scene, they remain minor players in the commercial market. Dan Fasulo, managing director at New York-based research firm Real Capital Analytics, said changes in currency rates overtime have less of an impact on decision making in institutional commercial property.

"For most major international investors, real estate is just one arm of a larger operation that usually includes investments in stocks and bonds. All of the currency risk usually gets hedged at the more macro company level for the different investment targets," said Fasulo. "It's not as big an issue in the commercial sector as it is in the residential sector, where it does have a significant psychological impact."

Still the Canadian dollar's rise has made some waves in commercial real estate. Toronto-based Brookfield Asset Management said in a note earlier this week it will invest $2.625 billion in equity to fund recapitalization of bankrupt General Growth Properties Inc. While retail property developer RioCan said earlier this month it plans to spend at least C$500 million on acquisitions this year, with a particular focus on the U.S. market.

While Fasulo keeps his eye on Brookfield, RioCan, and other property managers like Dundee, he said the loonie's race toward parity has little impact on commercial transactions.

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Posted by: Nina Turner

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