Foreign investors will be one of the top three sources of commercial real estate debt and equity this year, as abroad capital providers continue to view the U.S. as a safe haven for investments.
The multifamily sector will be the most attractive market for foreign investments, according to a new survey released by national law firm Akerman LLP.
“As 2015 unfolds, the industry is seeing an all-time record of institutional equity and global equity competing for core real estate assets,” said Richard Bezold, chair of Akerman’s Real Estate Practice Group.
The majority of foreign capital for multifamily deals is forecasted to originate from China — 50 percent of all foreign investments. The survey finds that executives believe China will be the dominant source of foreign capital for nearly all property types, aside from single-family homebuilding.
The purchasing power of the Chinese yuan over the U.S. dollar has the potential to be a significant driver for many U.S. markets, the firm states.
Despite the strengthening of the U.S. dollar against European and Latin American currencies, executives also believe investors from these regions will remain among the top three foreign capital sources this year.
Nearly 50 percent of executives surveyed predict the greatest increase in Latin American investment dollars will emanate from Brazil — 42 percent. Brazil will also receive the greatest increase (34 percent) of U.S. investment in Latin American real estate, followed by Mexico, 11 percent.
The survey also cites that a surge of EB-5 immigrant investors has fueled a “new era of high-rise development,” typically via mezzanine debt contributions. Expect select multifamily developers to utilize EB-5 funding when lining up project starts.