Foreign Investments in U.S. CRE Made Major Comeback in 2021

A Small, But Important Segment

• Foreign investment in U.S. CRE jumped to $69B in 2021, up 36% from 2019; Makes up about 10% of total CRE volume
• $33B placed in 4Q21 – Second highest quarter on record
• In the last 10 years, Canada comprised 32% of foreign capital, followed by Singapore, China, Germany, S. Korea

Where is International Capital Flowing To?

• Foreign investors favor gateway markets; New York, San Francisco, and Los Angeles lead the list
• Apartment and Industrial comprised most sales activity in 2021; Office, Hotel, and Retail have also been favorites
• Tend to favor portfolios and large assets

Foreign Investors Provide New Investment Opportunities

• Foreign investors may accept lower cap rates since their yield alternatives may differ greatly from the U.S.
• Some seek the stability of U.S. CRE – Willing to pay a premium to place large quantities in safe investments
• For sellers with properties in the right segments, foreign investors can be a worthwhile consideration

Includes sales $2.5 million and greater
Sources: Marcus & Millichap Research Services, Real Capital Analytics

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