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Where are Post-Pandemic Foreign Investors Heading?

The new age of foreign investment in US commercial real estate is marked by a shift in asset class preferences and target markets. Industrial properties have become the new primary target for foreign investors, followed by multifamily properties. Retail and office spaces have lost share. Sunbelt cities and asset classes that are not highly concentrated in the gateway metros are drawing particular interest. Institutional investors remain the predominant sources of international capital. Canada is the largest source of foreign investment in US real estate, followed by investors from the Asia Pacific region. Real estate firms can capitalize on this shift by forming strategic partnerships, offering consistency in underwriting and ease of doing business, providing market insight, and establishing satellite operations. Overall, the US market continues to be an overwhelming leader in the global commercial real estate space and draws in investors from abroad thanks to a wide range of assets and ease of doing business.

The Association of Foreign Investors of Real Estate, the leading foreign investment group who focuses on US commercial real estate, published their most recent Investor survey which showed:

  • The US market shows stability as preferred global destination for investment with allocations up 6% from 2022, relative to a 5% decline in European investment

  • Multifamily and industrial lead preferred property types, with office as leading concern for investors

  • New York returns to number one spot for preferred investment among US cities, up from fifth in 2022; London remains top among global cities

  • 97% of investors agree that continued interest rate rises weigh on access to capital, limiting reasonable financing and impeding transactions

  • Hospitality rises as an attractive property type for investment among 43% of investors

  • 86% of CRE investors believe that climate risks are not yet reflected in valuations


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