Foreign investments

U.S. foreign investment surpasses pre-pandemic levels

Real Capital Analytics: Foreign investors have turned away from big cities a bit, but the $70.8 billion invested in 2021 is the highest total since 2018’s $94.6 billion.

NEW YORK — As COVID-19 travel restrictions began to be lifted last year, foreign investors flocked to U.S. commercial real estate. Foreign investment surpassed pre-pandemic levels in 2021, according to a new report from Real Capital Analytics.

Foreign investors bought $70.8 billion worth of U.S. commercial real estate in 2021, surpassing 2019 and the highest total since 2018 of $94.6 billion.

The countries most represented in U.S. international business investment in 2021 were Canada, Singapore, South Korea, and the United Kingdom, according to the report.

However, investors in 2021 have turned away from traditional investments like office buildings and hotels in big cities like New York, San Francisco and Chicago. Instead, they have been drawn to growth sectors like warehouses, rental apartments and specialty office buildings for pharmaceutical companies, reports the Wall Street Journal.

Investors also shifted their target markets, focusing on the Sunbelt and smaller markets in coastal cities last year.

“It’s a different world,” says Riaz Cassum, global head of international capital coverage for JLL, a commercial real estate company. “You’re starting to see big institutional investors looking to Dallas, Charlotte, Denver, Nashville, Austin and other high-growth, low-tax markets.”

Source: “Foreign Investment in U.S. Commercial Real Estate Surpasses Pre-Pandemic Era,” The Wall Street Journal (February 8, 2022) [Log-in required.]

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