A recent article in National Real Estate Investors shows that overseas buyers are planning to continue investing in apartments in the US. This is based on a recent survey of the members of the Association of Foreign Investors in Real Estate.
Experts feel that the fundamentals of investing in US real estate are still good as the economy is still strong and there are opportunities in both main and secondary cities. Last year already saw huge investments by foreigners into apartment buildings in the US. According to the survey, nearly two thirds expects to make major or modest increases in their investments in real estate in the US while a third anticipate maintaining their current investment levels. This means that no one is planning to decrease their investment. The members who completed this survey are numbered amongst the largest institutional real estate investors and it’s estimated they have around $2 trillion or more in property assets under management. These types of investors tend to prefer industrial and multifamily properties, with retail being ranked third, followed by hotels and offices.
Out of those surveyed, 85% said their perspective of the real estate market in the US was virtually unchanged since the previous year although 80% acknowledged that it could be difficult to find attractive investment opportunities. Last year foreign investors were particularly active in the real estate market and investment into apartment properties involving overseas buyers expanded by 180%.
Overall, investors bought a total of $150 billion worth of apartment properties in 2015, nearly a third more compared to the previous year. The largest investors were Canadian, with the sale of Stuyvesant Town in New York City going to a partnership that included a Montréal-based firm and which counted for more than half of the $5.3 billion sale. However experts point out that it isn’t just about the big sales as the total amount is made up of lots of small transactions.
Buyers from other countries were also very active with the total volume of investment in apartment properties growing 81% compared to the previous year. UK investors spent just under $2 billion. Those investors from the Middle East bought apartments worth $1.6 billion, even though there were concerns about falling oil prices. Investors from Bahrain and Qatar were most active with a number of portfolio deals.