At Shane we make it a priority to have access to everywhere, whether it be nationally or internationally. By expanding our efforts and reach, we are able to find buyers; more specifically, the right buyer. On an international level, increased confidence in the US and North American markets has led to an influx of foreign investors seeking opportunities to invest in assets here on U.S. soil.
2015 has started off as the most active year since 2007. Investors are no longer focusing in just the core market cities like New York or Los Angeles. They are now shifting their focus to the markets that are emerging with tremendous developmental growth, such as Atlanta, Dallas, Denver and Seattle. The popularity of mixed-use developments is at an all-time high as they are the desirable development within city limits and the suburbs.
With all that is booming, the demand is high for all property types and foreign investors are riding the wave of the active market. As confidence grows in the market, foreign investors are seeking more profitable opportunities outside of their home countries, establishing a safe haven here while experiencing a tumultuous market elsewhere.
A recent survey revealed how much international activity is occurring in the United States.
In 2014, there was a total of $13 billion in foreign capital invested in the US:
– Asia invested $5.7 billion
– Europe invested $4.8 billion
– Oceania invested $1 billion
– Latin America invested $390 million
Working with international buyers is engaging on various platforms. It allows us to foresee what aspect of the market they favor, as well as gain insight as to why they are placing capital here. The growing market will continue to attract foreign investors. Since the down turn of the economy several years ago, commercial real estate has been rebuilding steadily for five years now. Some would even assume it is safe to say that the market has officially been restored. Foreign investors want to place capital where it is significantly cheaper, but more important, in a secure, less risky market, which has lead them outside of their region.
Asia is a major driving force behind international investments across the world. Investing billions in the U.S. market, Asia continue to be the top foreign buyer of investment properties here in the United States. The global collection of Asian outbound transaction for this year alone is monumental. The notable properties span the globe from New York to Australia. The prominent Waldorf Astoria Hotel in New York City was purchased by Anbang Insurance Group for close to $2 billion. A Washington D.C. office building sold for $445 million. Cross over the Pacific and Sheraton at the Park Hotel in Sydney, Australia was purchased by Sunshine Insurance Group Corp for $354 million. Two retail properties in London sold for a combined $696 million. All of these transactions occurred in Q1 of 2015, totaling U.S. investments alone to a little over $3 billion thus far.
Just two years ago, the market anticipated Asian investors spending billions on U.S. investments. Three quarters in to 2015, this predication stands true since the U.S. has been deemed “the top spot” for investors.
This summer our firm brokered the sale of a $68.5 million office building in Atlanta. The 390,000+ square foot building is positioned in a prime location that is continuously experiencing growth and will continue to do so as more people are moving closer to the office. The buyer you ask? A private South Korean family investor trust out of Sydney, Australia. Shane’s Vice President, Andy Sutton, will be advising them as they continue to build their portfolio here in the United States.
Likewise, even on the lower price levels, foreign investors are still an important factor in transactions. For instance, one of our brokers recently brokered the sale of a Cabana Grill located just outside of Atlanta. Shane found the right buyer who happened to be from South Korea. The buyer had just previously purchased another single tenant building in the neighboring town of Duluth. The seller was hesitant at first, dealing with a foreign buyer, but with the help of a local attorney, the seller’s concerns were eased, making for a smooth transaction.
Asia is not the only region that is contributing to flourishing international investor activity. Latin America is also placing capital in cities such as Miami. Wealthy, high net-worth Latin American investors are seeking retail and office properties throughout the U.S. and surrounding coastal cities. For example, a private investor from Argentina purchased a retail space in Atlanta. Escaping 30 to 40 percent currency devaluation against the dollar just days prior, the buyer was relieved to be investing in a sound market, while protecting his assets.
The U.S. market is strong and will continue to be as more foreign buyers continue to confidently invest here. A recent report published by World Property Journal claims that the United States has become the world’s largest real estate investment market. But, how much longer will this last? The market is stable with eager international buyers, but is it not indestructible. Currency devaluation in a key country like China can lead to changes in the marketplace and nervousness. However, Shane will ensure you that our expertise and knowledge will lead you to making the best decision with your asset.