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

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.