Multifamily Investment: Foreign Investment Keep Going

Multifamily Investment: Foreign Investment Keep Going

October 2019

Foreign Investors Drive Multifamily

In Chicago skyscraper race, multifamily is outpacing office, as Millennials flock to the urban environment.

Foreign investors continue to focus on the multifamily investment, despite a pull back in other asset classes, according to a Real Capital Analytics report. Foreign investors spent $16.1 billion on U.S. apartments over the last 12 months, end in Q2 2019, with Canadian buyers as the most active

Industry experts note that this activity is being driven by the low volatility seen in this sector and the continued movement toward renting versus home-buying in the U.S.

As ongoing demand for apartments has reduced vacancy in many markets, investors keep moving in. They also are attracted to the diverse rental stream from a variety of tenants, an environment that is viewed as less volatile than a single tenant office building, for example.

As noted by National Real Estate Investor, cross-border multifamily sales volume rose 10 percent, year-over-year, to $16.1 billion

Foreign Investors want Class A Assets

Foreign investors were focusing on bigger deals with more expensive, Class A assets. The average sale during the past 12 months, ending with Q2 2019, was $43 million per community. The average cap rate was 5.3%.

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