Who is Investing in U.S. Real Estate from Overseas?

TRiTON Companies Who is Investing in U.S. Real Estate from Overseas ?

The North American real estate market continues to present overseas investors the most attractive real estate investment market in the world, but with the global re cession in place,

the arena of international investors has been changing.

The question we get most often from our Investment Banking clients is who exactly is investing in U.S. real estate from overseas?

We ran across an interesting article from the Research Whitepaper that I thought you would find interesting. The following are what recent reports and surveys have found:

CanadianinstitutionsaresnappinguppropertiesacrossEastCoastveryfast–sofar,therehasbeensteadyacquisitionsfromCanadianbanks,Canadianfunds,Canadianrealestatecompanies.Theinstitutionssofarhavebeenmore

focusedintheeastcoastcities,mainlyNewYorkCity,Boston,Chicago,butalsoinFloridaaswell.Canadianinvestorshaveacquiredcommercial,industrial,shoppingcentersandalsosomehoteldevelopments–asCADcontinuestoclimbagainstUSD,whichmayreachparityverysoon,thistrendshouldnotstopintheshortterm.

GermanscontinuetoshowstrongsupportinUSproperties,Germaninvestorsarealwayslong‐termpropertyinvestors;andtheyareoneofthemajorpropertyownersaroundtheworld.Germaninstitutionsaremainlyinterestedinoffice&othercommercialassets,theyareoftenlookingforAGradeorPremiumGradefacilities,someareoftenleasedbacktomajorGermaninstitutionsasanchortenantssuchasDeutscheBank,BMWandSAP.GermaninvestmentfirmshavebeenrepackagingAmericanassetsintotheirregional‐specificrealestatefunds,andtheycurrentlyrank2ndmostactiveforeigninvestorsinUS,justbehindJapan.

Japaneseinvestorsarestillveryactive,andwitheconomyfinallyonrecoveryroad;aswellasrelativelylowinvestmentrentalyield;JapaneseinstitutionsarefindAmerican

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Who is investing in U.S. Real Estate from Overseas?

propertiesofgreatvalue.Similartostrategiesdescribedabove,alotofJapaneseinstitutionownedpropertiesareleasedtomajorJapanesecorporations,thisactuallygivetheownersmoreconfidenceinsomecases.

KoreaninvestorsarerelativelynewinvestorsinNorthAmericanassets,althoughindividualinvestorshavebeeninvestinginAmericanpropertiesforover25yearsnow.KoreaninvestmentfundsincludingitssovereignfundshaveboughtanumberofmajorpremiumgradebuildingsinmajorUSmetropolitanareassuchasChicago,NewYork.Also,notably,KoreanindividualinvestorshavebeenveryactiveinAtlantaandTexas;someofthemajorshoppingmallsarebeingbuiltbyKoreaninvestorssupportedbyKoreanbanksbackinKorea.

IsraeliinvestorsarealsocomingintoUSassetsforthefirsttime,ledbyIsraeliinstitutions.Sofar,investmentshavebeenaroundkeycommercialcentersinUS,mainlyNewYorkCityandotherassets.Investmentshavebeenquitediverse,rangingfromcommercialtowerstosomespecialtypropertiessuchasmedicalcentersandnewbusinessparks.

Chinesebanks–Chinesebanksarefinallystartingmakingtheirmovesoffshore,andatgrandstyle.WehadreportedthatChinesebankshaverecentlycompletedamulti‐billiondollarsinUKinredevelopmentsofpartsofLondon.

TheChinesebanksarealsoexpandingtheirpresenceinUnitedStates,lendingarelikelytobeprovidedtoresidentialdevelopmentsaswellasshoppingmalls;

sofar,theseactivitiesaremainlyconcentratedinLA,SanFrancisco,NewYorkCityandSiliconValleywheretherearelargepresenceofChinesecommunities.However,asallmajorChinesebanksarenowpubliclistedcompanies,manyarelistedonNYSE,itiswidelyexpectedtheywillbeasactiveasJapaneseinvestorsin3to5yearstime.

By W. Brent Virkus, September 13, 2010