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The Role Foreign Investors Play in the U.S. CRE Market

February 21, 2022 by Marcus & Millichap Research Services

 

Foreign Investments in U.S. CRE Made Major Comeback in 2021


A Small, But Important Segment

  • Foreign investment in U.S. CRE jumped to $69B in 2021, up 36% from 2019; Makes up about 10% of total CRE volume
  • $33B placed in 4Q21 – Second highest quarter on record
  • In the last 10 years, Canada comprised 32% of foreign capital, followed by Singapore, China, Germany, S. Korea

Where is International Capital Flowing To?

  • Foreign investors favor gateway markets; New York, San Francisco, and Los Angeles lead the list
  • Apartment and Industrial comprised most sales activity in 2021; Office, Hotel, and Retail have also been favorites
  • Tend to favor portfolios and large assets

Foreign Investors Provide New Investment Opportunities

  • Foreign investors may accept lower cap rates since their yield alternatives may differ greatly from the U.S.
  • Some seek the stability of U.S. CRE – Willing to pay a premium to place large quantities in safe investments
  • For sellers with properties in the right segments, foreign investors can be a worthwhile consideration

Includes sales $2.5 million and greater
Sources: Marcus & Millichap Research Services, Real Capital Analytics

Watch the Video Below

 

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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