It is expected that foreign money will continue to be a strong presence in American real estate investment. As many other world economies remain unsettled, or on a downward trend, the United States offers them an opportunity to make solid commercial real estate investing decisions.
According to the Association of Foreign Investors in Real Estate (AFIRE), many foreign investors are seeking a solid and reliable place to put their money and have an opportunity for the investment to grow, and the United States is currently providing that opportunity.
Foreign investors are finding investment opportunities in many different areas of real estate; from cities that are considered destination spots, to smaller cities, foreigners are searching all over for places to put their money. Apartment buildings seem to be the preferred place of investment, and those numbers are expected to grow in 2016.
The Future Looks Bright Too
When AFIRE conducted a survey of its members, 64% expected to have a modest or even a major increase in their investment in the United States real estate markets in 2016. Most of the other third who responded to the survey stated they expect to match their investments in 2016 according to the AFIRE survey. All told, the members of AFIRE, which is the world’s largest institutional real estate investors group, has an estimated $2 trillion in real estate assets that they manage.
Most of the investors from AFIRE prefer to purchase multifamily or industrial properties—buildings like apartment units are among their overall favorites. Their next preferred investment was offices and hotels. The only thing that could hold back the AFIRE members in their investments was finding real estate to invest in. Eighty percent of the respondents reported that it was difficult to find appropriate real estate with 35% finding it very difficult and 45% finding it somewhat difficult to find good investment opportunities.
This belief that 2016 will be a great year follows on the heels of another great year for foreign commercial real estate investing in the United States. There was an increase of 180% of investment in apartment properties that had foreigners involved in the deal.
Canadians spent more money in the United States on apartment-real estate than people from any other foreign country. It is estimated that Canadians invested more than $10 billion. Investors from the United Kingdom invested just under $2 billion, while Middle Eastern investors spent approximately $1.6 billion even with oil prices falling.
It is because of this economic uncertainty in other countries that the United States is the leader in commercial real estate investing among investors from other countries.