Michael Gerard is Marketing Director at GRS Group
(949) 272-0022
[email protected]
It’s no secret that the United States is considered a safe-haven for international companies seeking investments, due to financial uncertainty around the world–especially in China.
These investments, however, are now extending beyond the top-tier, traditional locales such as New York City and San Francisco. For example, a sovereign-wealth fund from Bahrain just spent $250 million on an office portfolio in the Southwest. The assets total 1.2 million square feet, made up of buildings between Dallas and Phoenix; and this portfolio is still 51-percent owned by Regent Properties.
A great place to learn more about foreign dollars coming into the United States for commercial investments is the Association of Foreign Investors in Real Estate (AFIRE). The organization has its annual meeting in Washington, D.C., in September.
Despite the sizable deal that just took place in what are considered secondary markets, the primary markets are still king for commercial real estate, for now. Bloomberg reported, at the beginning of the year, that New York City remains the top investment market in the world. Other domestic markets that round out the top five, globally, are Los Angeles and San Francisco.
Multifamily is reportedly still the highest-ranking commercial real estate type that sells, followed by industrial. But based on the Bahrain transaction, the appeal of office, it seems, could be rising.
For example, a sovereign-wealth fund from Norway even just bought a higher stake in Hudson Square joint venture with Trinity Church Wall Street, in Manhattan.
As far as a real estate investors go, sovereign-wealth entities are making a huge splash. They have upped their funds under management from $200 billion, to $6.5 trillion, in only the year-over-year period ending in March.
There are only so many assets one can buy in U.S. “trophy” cities, however. If investors continue to look for commercial real estate properties here, expect them to migrate their dollars into into plenty of secondary markets that are seeing improved economies since the recession.