Back in the heady year of 2007, the amount of foreign investment in U.S. real estate totaled $40 billion. Two years later, after the subprime blow-up, Wall Street crash, recession and rampant foreclosures, foreign investment plummeted to $4 billion.

According to Real Capital Analytics, 2010 marked a return of foreigners to American real estate as investment doubled to $8 billion — and a lot of that capital, like goose migrations, came south from Canada.

To get those numbers, Real Capital Analytics scrutinizes major commercial real estate deals, which doesn’t include single-family home sales. But, it does include transactions involving multifamily properties, which are still proving very popular with foreign buyers.

In the past, opportunists looking to interest foreigners in U.S. property markets might have targeted the Germans, British and in years past the Japanese. Now, besides the Canadians, some newer players have emerged: South Koreans and Israelis.

Back in the heady year of 2007, the amount of foreign investment in U.S. real estate totaled $40 billion. Two years later, after the subprime blow-up, Wall Street crash, recession and rampant foreclosures, foreign investment plummeted to $4 billion.

According to Real Capital Analytics, 2010 marked a return of foreigners to American real estate as investment doubled to $8 billion — and a lot of that capital, like goose migrations, came south from Canada.

To get those numbers, Real Capital Analytics scrutinizes major commercial real estate deals, which doesn’t include single-family home sales. But, it does include transactions involving multifamily properties, which are still proving very popular with foreign buyers.

In the past, opportunists looking to interest foreigners in U.S. property markets might have targeted the Germans, British and in years past the Japanese. Now, besides the Canadians, some newer players have emerged: South Koreans and Israelis.

I was a bit perplexed by that last inclusion, so I called James Fetgatter, chief executive of the Washington, D.C.-based Association of Foreign Investors in Real Estate (AFIRE), which confirmed that Israelis are "very active" investors in this country.

At first, the phenomenon seemed a little strange to me because Israel is such a small country. Then, when I thought further about it, I realized I wasn’t considering the fact that Israel has a sophisticated economy that throws off a lot of excess capital beyond the country’s borders.

In addition, the close political and economic ties between the U.S. and Israel create a comfort zone for Israeli investors who might want to buy something rich and complicated, like a high-rise in Manhattan or an individualistic and simple property such as a condominium in Naples, Fla.

The other surprising thing I learned: Israeli investment in U.S. real estate picked up in the past year because a lot of that capital originally had been invested in Eastern Europe and those property markets have indeed lived up to — and beyond — their high-risk profile.

I mentioned to Abe Schear, a partner with the Atlanta law firm Arnall Golden Gregory LLP and a specialist in matching Israeli real estate investors with U.S. sellers, that investing in places like Hungary, Slovakia and Romania has been like a trip to the Wild West. Schear gave me the verbal equivalent of a finger-wagging, saying no — it was the "Wild East."

In either case, the Israelis have scrambled back from Eastern Europe and are now looking for safer havens, such as the U.S.

"Israelis are significantly more interested in the United States today than five years ago when we started out," said Schear. "Five years ago we had overheated pricing in U.S. markets, poor currency exchange, and the Israelis thought they could do better in other parts of the world.

"Now, prices have reset to a more reasonable level in the United States, the currency exchange is more favorable, and various parts of the world are not as attractive as five years ago."

In 2010, Schear guesses Israeli investment in U.S. real estate totaled more than a billion dollars.

AFIRE recently surveyed its members in regard to the areas in the world that would have the best prospects for capital appreciation. Four years ago, the U.S. and China were tied in the annual survey for the top spot.

In 2010, the U.S. stood alone at the apex, with members saying it has the greatest chances for capital appreciation. (In 2007, 26 percent of survey respondents chose the United States as No. 1; in 2010, 75 percent chose the U.S.)

Big Israeli companies have been investing in the U.S. for a long time, but we are now seeing a lot of small, private investors, many of which like the apartment sector, Schear said.

"The really big companies are in retail or office and can take down large amounts of property, and can do very big deals," said Schear. "Certainly, a big office tower in New York or Atlanta is going to cost more than an apartment complex. Smaller Israeli companies are very actively looking for investments in the United States in the multifamily area."

To be more specific, Schear added, "They would be very satisfied with a decent garden apartment product in the 200- to 300-unit range, something they could upgrade."

One doesn’t find too many garden apartments in the Big Apple, although Israelis have tended in the past to be very New York-centric. In the past five years, Israeli investors have spread out, down the Atlantic Coast and into California.

"The Israelis are in markets boasting relatively strong employment," Schear said. "They like Atlanta and places where there are state universities." Plus, they are willing to buy in cities such as Raleigh, N.C., and Columbia, S.C., to spread risk, he said.

This puts the Israelis at odds with most other foreign investors who tend to stick to the same big cities.

Optimism about U.S. real estate markets is definitedly focused on some hot spots, Fetgatter noted. "New York and Washington, D.C., are at the top of the list. What’s new about that is foreign investment is so clearly focused on these two cities almost to the exclusion of everywhere else.

"The gap between New York and D.C. and the rest of the cities in the United States — even the usual suspects like San Francisco, Los Angeles, Boston and Chicago — was extremely wide in 2010."

Asked if Israelis were interested in investing in single-family homes, Schear said he’s heard about some investors who were trying to accumulate portfolios of homes, but he, himself, has not been involved in any of those deals.

To find those investors, brokers need to do what they always do: Locate somebody or some group — lawyers, brokers or the American-Israel Chamber of Commerce — that has access to those potential buyers.

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