Market Timing Academy Who is Investing in U.S. Real Estate from Overseas?
The North American real estate market continues to present overseas investors the most attractive real estate investment market in the world, but with the global recession in place, the arena of international investors has been changing. The question we get most often from our Investment Banking clients is who exactly is investing in U.S. real estate from overseas? We ran across an interesting article from the Research Whitepaper that I thought you would find interesting. The following are what recent reports and surveys have found: Canadian institutions are snapping up properties across East Coast very fast – so far, there has been steady acquisitions from Canadian banks, Canadian funds, Canadian real estate companies. The institutions so far have been more
focused in the east coast cities, mainly New York City, Boston, Chicago, but also in Florida as well. Canadian investors have acquired commercial, industrial, shopping centers and also some hotel developments – as CAD continues to climb against USD, which may reach parity very soon, this trend should not stop in the short term. Germans continue to show strong support in US properties, German investors are always long‐term property investors; and they are one of the major property owners around the world. German institutions are mainly interested in office & other commercial assets, they are often looking for A Grade or Premium Grade facilities, some are often leased back to major German institutions as anchor tenants such as Deutsche Bank, BMW and SAP. German investment firms have been repackaging American assets into their regional‐ specific real estate funds, and they currently rank 2nd most active foreign investors in US, just behind Japan. Japanese investors are still very active, and with economy finally on recovery road; as well as relatively low investment rental yield; Japanese institutions are find American
Who is investing in U.S. Real Estate from Overseas?
properties of great value. Similar to strategies described above, a lot of Japanese institution owned properties are leased to major Japanese corporations, this actually give the owners more confidence in some cases. Korean investors are relatively new investors in North American assets, although individual investors have been investing in American properties for over 25 years now. Korean investment funds including its sovereign funds have bought a number of major premium grade buildings in major US metropolitan areas such as Chicago, New York. Also, notably, Korean individual investors have been very active in Atlanta and Texas; some of the major shopping malls are being built by Korean investors supported by Korean banks back in Korea.
so far, these activities are mainly concentrated in LA, San Francisco, New York City and Silicon Valley where there are large presence of Chinese communities. However, as all major Chinese banks are now public listed companies, many are listed on NYSE, it is widely expected they will be as active as Japanese investors in 3 to 5 years time. By W. Brent Virkus, September 13, 2010
Israeli investors are also coming into US assets for the first time, led by Israeli institutions. So far, investments have been around key commercial centers in US, mainly New York City and other assets. Investments have been quite diverse, ranging from commercial towers to some specialty properties such as medical centers and new business parks. Chinese banks – Chinese banks are finally starting making their moves offshore, and at grand style. We had reported that Chinese banks have recently completed a multi‐billion dollars in UK in redevelopments of parts of London. The Chinese banks are also expanding their presence in United States, lending are likely to be provided to residential developments as well as shopping malls; 2