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Foreign investors still bullish on American CRE

On Behalf of | Jun 8, 2017 | Uncategorized

Investors in Missouri and around the country are drawn to commercial properties because they generally offer robust yields and provide a hedge against inflation, and a report from the National Association of Realtors suggests that foreign investors also see American office buildings, warehouses and stores as safe places to put their money. The trade group’s Commercial Real Estate International Business Trends survey reveals that one in five of the realtors who closed a commercial property deal in 2016 did so with a foreign investor.

While large commercial property transactions may receive the lion’s share of media headlines, the NAR survey reveals that foreign buyers spent an average of $1 million on each of their commercial real estate acquisitions in 2016. Florida was the most popular state for overseas investors, but they were also active in other major markets like Texas, California and New York. The vast majority of these properties were bought for investment or business purposes according to the NAR.

Most of the realtors surveyed expect even more foreign real estate investment during the remaining months of 2017 as the U.S. economy continues to grow and add jobs. Overseas buyers from countries where economic prospects seem less encouraging have been particularly active. Chinese investment is partly being spurred by looming currency controls according to experts, and a large amount of money is being pumped into American commercial property by Venezuelan investors looking for a safe haven.

Commercial real estate transactions are often highly complex and difficult to close, and this can be especially true when foreign buyers are involved. Attorneys with experience in this area may be able to anticipate and address the myriad legal challenges involved in completing cross-border transactions, and they could also help commercial property sellers to avoid misunderstandings caused by cultural differences.