RCA Insights

Canada, Singapore Lead Cross-Border Activity in US as China Deal Flow Wanes

By on November 29th, 2017

Canadian and Singaporean investors have upped the pace of their commercial real estate acquisitions in the U.S. while activity from Chinese investors has waned, the latest US Cross-Border Investment Compendium shows. Deal volume by Singaporean buyers increased more than 200% in the first nine months of 2017 compared with a year earlier, pushing them into the #2 position behind activity by Canadian investors.

 

1711 Cross Border Comp main-01

In the face of new capital regulations at home, U.S. transactions by Chinese investors dipped 55% in the year to date compared with a year earlier, nudging them to the #3 spot. In 2016 Chinese players were the largest investor group in the U.S.

Overall, cross-border capital fell to an 11% share of total U.S. market activity in the third quarter. The declining share of cross-border investors was steeper in the 6 Major Metros (6MM) of the U.S. than in the secondary and tertiary markets. In the 6MM the proportion of deals by cross-border players slipped to 15% in the third quarter of 2017 from a peak of 23% a year earlier.

In one surprising new trend, overseas players increased their activity in the suburban office market. While CBD office investment volume dropped, deal activity in suburban offices rose 4% in the 12 months through the third quarter.

If you are a current RCA subscriber log into your account to download the  US Cross-Border Investment Compendium for Q3’17 from the RCA website.

Jim Costello

Jim Costello

Senior Vice President
jcostello@rcanalytics.com

Jim Costello has worked in the CRE space on issues of urban economics since 1990, including a 20-year stint at Torto Wheaton Research. Jim expanded the reach of the Torto Wheaton Research team developing forecasts of global market fundamentals. He also developed approaches to pair the forecast results with frameworks to answer investor questions on asset values and relative investment opportunities.

In the aftermath of the Global Financial Crisis, Jim provided advice to the Treasury Department and helped educate these professionals on commercial real estate performance. Jim is a member of the Commercial Board of Governors of the Mortgage Bankers Administration, where he helps policy makers understand the commercial real estate industry.

Jim is expanding the capabilities of the Real Capital Analytics team on issues of real estate market dynamics. Jim has a master’s degree in economics and is a member of the Counselors of Real Estate.