Foreign investors are entering the U.S. commercial real estate market as, “low interest rates, strong dollar, [and] improving property fundamentals all bolstering global capital flow to the U.S. real estate [market].” Foreign investors want to diversify their investment holdings within the U.S. and are betting on the U.S. dollar to preserve their wealth and make a reasonable yield. Therefore, foreign investment will continue to strengthen the U.S. commercial real estate market as demand increases and supply decreases.
Excerpts from Article: “While many central banks from around the world are once again looking to stimulate growth through monetary easing, the U.S. is nearing the point where it can grow on its own,” Thorpe said. “We expect foreign investment for U.S. commercial real estate to remain extremely robust in 2015 regardless of what happens with the [U.S.] dollar.”
“The strong U.S economy judged against many other foreign countries has many analysts seeing continued strong global flow of capital into U.S. properties.”
“Yes, it is more expensive to buy, but once they get it, in addition to getting a strong asset in a U.S. market with strong fundamentals, they might capture the upside of an appreciating currency when they go to sell,” he said. “Moreover, the bulk of foreign investment is still mainly focused on capital preservation. It is less about yield than it is about protecting what you already have.”
Citation and Link: Heschmeyer, Mark 18 Mar. 2015. “Cross Border Investors Casting Wider Net Beyond Core Properties, Markets,” Costar Group. 24 Mar. 2015 http://www.costar.com/News/Article/Cross-Border-Investors-Casting-Wider-Net-Beyond-Core-Properties-Markets/169861