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How Global Forces Affect the U.S. CRE Market

July 5, 2022 by Marcus & Millichap Research Services

Why Is the U.S. a Top Destination for Foreign CRE Investors?

Upswing in Foreign Investment Into U.S. CRE

  • Foreign investment totaled $72B in last 12 months, double the amount at the height of the pandemic
  • On average, makes up 10% of total investment in U.S. CRE
  • Canada led foreign investment, followed by Singapore, China, Germany and South Korea

Economic Outlook Supports Long-Term Investments

  • Low unemployment, job creation and robust consumer spending suggest strong economic growth
  • While labor shortages and inflation remain headwinds, underlying demand drivers will sustain CRE performance

U.S. Offers Market Stability and Higher Yields

  • Average U.S. CRE cap rate is about 5.9%, higher than 5.5% in the U.K., 5.3% in Canada and 4.7% in Germany
  • Investors willing to outbid local investors to place capital in specific secure assets and markets
  • Global economic shifts may bring more foreign investors to U.S. – Creates new opportunities for the right sellers

*Trailing 12 months through 1Q
Includes apartment, retail, office, industrial, and hotel sales $2.5 million and greater
Sources: Marcus & Millichap Research Services, Real Capital Analytics

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Filed Under: Research Brief

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This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2020 Marcus & Millichap and Limon Net Lease Group

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