RCA in the News

Foreign Buyers Increase Investment in US

GlobeSt / October 22nd, 2015

GlobeSt reports: Foreign capital in the US is reaching new heights. According to Bob White, president of the data and analytics firm, Real Capital Analytics, “The past 12 months saw $62 billion in foreign acquisitions, versus 2007, when it was about $52 billion.” White notes that foreign buyers rank only behind domestic private investors, surpassing REITs and institutional buyers. “While it varies by property type, so far in 2015, 16% of the buys can be attributed to foreign investors—the highest we’ve seen since 2000.”

Although Asian capital is still a significant source of cross-border capital, many players are involved. “Canada remains number one at about $20 billion over the past 12 months,” White says. Norway ranks second, thanks to its sovereign wealth fund, Norges Bank Investment Management. He notes, “They’re very aggressive, and like the Canadians, they’ve been doing big joint-venture interests.”

China places fourth, behind Singapore. White says, “We’re seeing a lot of private high net-worth capital coming in and buying $5 million to $20 million apartment or hotel properties.” Germany ranks fifth for top foreign investors, and European capital in general is growing. “While Chinese investors have gotten a lot of attention,” he says, “and certainly there’s capital from Asia, European capital is at an all-time high.”

Foreign capital is still heavily tied to deals in the six major markets, yet White recognizes the spread of cross-border capital to new markets. He says that RCA currently tracks Chinese capital in 33 of the 50 states, highlighting the emerging interest insecondary and tertiary markets. Furthermore, of the 16% of total foreign investment activity, White notes, “It accounts for 19% of the volume in the six major gateway metros; 13% in secondary markets such as Dallas, Atlanta and Seattle and 10% in tertiary markets.”

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