International investors withdraw from US real estate Business

International Real Estate investors

International investors have become net sellers of commercial real estate this year for the first time since 2012. There was no country that justified the change, but a slight decline in purchases that changed the investment equation.

Investors made direct acquisitions totaling $ 21.3 billion in the first half of 2019, but sold just over $ 21.4 billion, according to a new report by Real Capital Analytics.

"Prices are at record levels in the US Our capitalization rates are at record levels, and at first glance it would be difficult for investors to put money aside in the United States." are not what they were a few years ago said Jim Costello, senior vice president of Real Capital Analytics Blackstone buys US warehouse buildings in Singapore based GLP for $ 18.7 billion

In the second quarter alone, acquisitions were down 37% from last year. This is partly due to the fact that very large contracts were signed last year. The comparison with this year has therefore been distorted. When international investors buy assets in the United States, they usually have to put a lot of money at a time to operate efficiently. The same is true of huge sales.

While investors are still active, it just becomes more difficult to protect against all the market risks, especially the exchange rate and the volatility of interest rates. They bought less so far this year, but they also sold less. 

There is no better option when have a property that is flowing money

Investors are increasing their spending in the office and apartment sectors after making strong gains in retail trade last year. They are investing more capital in the New York area; Boston; Seattle; and Las Vegas, but putting less in Los Angeles; Phoenix; San Jose, California; and Washington, D.C., according to Real Capital's report.

Canada, Germany and Singapore are the largest purchasers of US commercial real estate by volume. While Canada and Germany increased their investments each year, those in Singapore dropped by 55%.

China is a much smaller investor, but its dollar volume has dropped by 74%. this is due to stricter government capital restrictions over the past year. Elsewhere, investors in the Middle East have grown significantly in the US apartment market, which could be a safety gulf in the face of volatile oil prices.

The recent decline in interest rates has not yet been taken into account, as the conclusion of commercial real estate suitable cities transactions can take 20 to 30 weeks, and interest rates have really started to fall only in last few months.