It’s no secret that foreign investors, from sovereign wealth funds to insurance groups, have been eager to park their money in U.S. commercial real estate lately. A new report from commercial real estate services firm Newmark Grubb Knight Frank breaks down exactly how much money was spent, who was spending it and what they were spending it on in recent months.
- Foreign buyers invested more than $85 billion in U.S. commercial assets over the past 12 months;
- Year-to-date in 2016, international capital sources spent a total of $19.1 billion on U.S. commercial real estate;
- Chinese investors led the total acquisition volume year-to-date, with $7.68 billion, with Canada a distant second at $1.22 billion;
- For the past six years, Canada has been the biggest source of foreign capital in U.S. commercial real estate. From the first quarter of 2015 through the first quarter of 2016, Canadian investors spent $27.9 billion on U.S. commercial assets;
- A disproportionate volume of foreign money (22.0 percent) has been placed into assets in New York City, with the greatest volume of Chinese, German, South Korean and Japanese funds going to properties in Manhattan.
- The outliers included investors from Singapore, who showed a preference for properties in Los Angeles and Phoenix, Swiss investors, who spent the most money in Portland, Ore., and investors from the U.K., who favored Philadelphia.
- By total volume of foreign funds invested, the closest contenders to New York City were San Francisco/San Jose, at 7.6 percent, and Los Angeles, at 5.1 percent.
- In recent months, however, foreign investors have been increasingly purchasing properties in secondary markets, with Charlotte, N.C. experiencing the most significant increase in transaction volume in the first quarter of 2016, at 29.8 percent.