Foreign Investors Target Improving U.S. Markets
Though confidence among U.S. investors remains tepid, global commercial real estate investors are enthused about the opportunities American property markets may hold in 2011, according to the 19th annual 4Q10 member survey. “As the fear of a double-dip recession has faded, investors are … taking aim at real estate investment opportunities in the U.S.,” said James A. Fetgatter, chief executive of AFIRE in Washington, D.C.
The U.S. ranked No. 1 on the list of countries global investors are targeting for fund placement in 2011. In addition, more than 60 percent of survey respondents think the U.S. will provide the greatest opportunity for capital appreciation this year, a sharp contrast to 2006 when just 23 percent expected the U.S. markets to lead in capital appreciation.
With the exception of multifamily properties, Fetgatter noted that the majority of investors plan to narrow their focus to assets located in New York and Washington, D.C. Boston, San Francisco, and Los Angeles round out the top five U.S. markets investors are targeting this year. While multifamily remains the property sector of choice, retail ranked second, followed by hotel, office, and industrial, according to the survey.
Interest in emerging markets has expanded as well. For the third straight year, Brazil ranks No. 1 among emerging markets for investment, followed by China, India, Vietnam, and Mexico respectively. Russia, which has been a top five emerging market the past two years, dropped to 10th place on the survey in 2011.
Top Global Cities for Investment in 2011
- New York (up from No. 3 in 2010)
- Washington, D.C. (No. 2 in 2010)
- London (down from No. 1 in 2010)
- Paris (No. 4 in 2010)
- Shanghai (up from No. 9 in 2010)