Foreign Investment Continues to Fuel CRE Market

Foreign Investment Continues to Fuel CRE Market

February 2016

cross-border investors

Cross-border investors target industrial properties in 2015. (Photo via GlobeSt)

Cross-border investors seized a larger share of the U.S. market in 2015, continuing a buyer spree that has fueled the market for several years.

Research from Real Capital Analytics’ latest U.S. Capital Trends Report found that deal volume for cross-border investors rose 123 percent from 2014 to 2015. That gave that class of investors a 16 percent share of the deal activity in the market.

RCA found that cross-border investors targeted properties in both gateway cities and secondary markets. JLL reported similar findings in its latest U.S. Investment Outlook report. According to JLL, foreign investment in the U.S. broke a seven-year-old record high by more than $30 billion.

As Steve Collins, international director and president of JLL Capital Markets—Americas, told GlobeSt, “While we’re seeing volatility and uncertainty in parts of the financial markets, the relative strength of economic and leasing fundamentals continues to position the United States as an attractive, healthy and transparent market for cross-border investment.”

GlobeSt has a close look at the reports from Real Capital Analytics and JLL.

Other highlights from RCA’s report include:

  • Overseas buyers dominated U.S. industrial assets, purchasing more than any other group.
  • Institutional/fund capital sources represented 35 percent of apartment, office and hotel portfolios in 2015.
  • Digging deeper, those buyers accounted for 43 percent of apartment portfolio sales, a leap up from 24 percent in 2014.
  • Public investors fell back in the past year as volume dropped five percent.

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