RCA Insights

Overseas Investors Dial Down Purchases of U.S. Real Estate

By on December 5th, 2019

Purchases of U.S. commercial real estate by cross-border investors slipped in the third quarter of 2019, the latest edition of the US Cross-Border Investment Compendium shows. The decline was seen both in the volume of deals completed and the cross-border share of the U.S. market, as activity returned to more typical levels.

For the first nine months of the year, dispositions of real estate exceeded purchases by $18 billion. The large net negative investment was driven by the sale of interests in GLP by Chinese investors in the third quarter of the year.

Chinese investors had represented an outsized presence in the U.S. commercial real estate market from 2014 to 2017, with high profile acquisitions in gateway markets. For the 12 months through the third quarter of 2019, even capital from Bahrain exceeded Chinese investment in the U.S.

The rapid pace of purchases by Chinese investors had helped push cross-border acquisitions up to 18% of total direct acquisitions in the U.S. in late 2015. Cross-border activity pulled back to only 10% of total investment in the 12 months through the third quarter of this year.

If you are a current Real Capital Analytics subscriber log into the RCA website to download the latest US Cross-Border Investment Compendium PDF and data file for Q3 2019.

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Jim Costello

Jim Costello

Executive Director, MSCI Research
jim.costello@msci.com

Jim is chief economist on the MSCI real estate research team and is based in New York. He previously led the U.S. research team at Real Capital Analytics, which MSCI acquired in 2021, and spent two decades at Torto Wheaton Research, working in urban economics. He is the lead author of the US Capital Trends publication and a frequent speaker at commercial real estate conferences. Jim holds a master’s degree in economics and is a member of the Commercial Board of Governors of the Mortgage Bankers Association.