The Changing Dynamics of Foreign Investment in U.S. Commercial Properties

The United States commercial real estate market has long been a top destination for foreign investors to place their capital and, for the most part, that hasn’t changed in the post-pandemic era. What has changed is, like in the U.S., investors from abroad have shifted their main focus to sectors that are higher in demand, including multifamily, leaving the troubled office sector with limited transaction activity. But cross-border office investment in the U.S. isn’t dead. Globally, the interest in snapping up office properties remains strong but, again, like their U.S. counterparts, foreign investors are contending with high interest rates and the seemingly immovable gap between the price sellers want and the amount buyers are willing to pay. 

With cross-border and domestic activity combined, transactions in the U.S. real estate market remain muted to say the very least. Investors from some countries, including China, have all but crossed the U.S. off their list. “Chinese commercial real estate investors are turning away from the United States for several reasons,” Juwai IQI, an Asia-based global real estate technology group, said in a recent report. “The American commercial market is struggling with higher interest rates and fears that property values may take a more significant hit in the months ahead.” Additionally, China is having its own real estate problems, as its market is in a slump. Recent news like top Chinese property developer Country Garden’s abrupt withdrawal of a $300 million share placement only served to increase concerns regarding the possibility of the country’s real

Read more at Propmodo.

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