Foreign Investors Pile into US Commercial Real-Estate Bubble

Jon Blogosphere, Market Commentary, Politics, Real Estate

With impeccable timing, after a blistering 7-year price boom. 2016 might later be called the peak year in terms of commercial real estate, or even the post-peak year, depending on the metric. Overall office sales in 2016 fell 7% from 2015, to $140.5 billion, according to JLL research cited by CommercialCaf, a sister company Yardi Matrix. And leasing activity was hampered by office tenants that were ‘reluctant to make any major moves pending the conclusion of the presidential election.’
But graciously, foreign investors jumped in with both feet to help out. The report by CommercialCaf:
[T]he market has become a haven for offshore investors, who are pumping record amounts of capital into US office assets, especially in primary urban cores. According to JLL research, foreign office investment surpassed $20 billion in 2016, accounting for 16% of the overall acquisition volume. And while, historically, Canadians have been the most active foreign players on the market, Asian and German investors are now stealing the spotlight.

This post was published at Wolf Street on Mar 14, 2017.