U.S. Commercial Real Estate: Asian Interest Still Explosive
In all honesty, I wish I could say I was surprised. Real estate firm CBRE has called the United States, a “top target” for Asian estate investing, noting a $3.3 billion investment in jus the first quarter of 2015. That’s a nice jump from the $7.7 bullion invested in full-year 2014.
According to CBRE, “The increasing activity in total Asian outbound investment and US real estate is in line with CBRE's 2015 APAC Investor Intentions Survey, wherein 32% of respondents expressed the intent to deploy capital outside of APAC, with a further 12% expected to spend more than in 2014.”
“The strong economic recovery and sustained low interest rate environment in the US have prompted some investors to shift their focus from Western Europe to North America, with 43% preferring North America, closely followed by Europe with 42%, opposed to a respective 20% and 23% split reported back in the 2014 APAC Investor Intentions Survey.”
Again, I’m not surprised.
As I’ve noted in the past, “With the value being offered, China’s investors are just beginning to invest in U.S. commercial real estate, as China slows and investment regulations change.”
I've watched as Asian investors bought the 60-story One Chase Manhattan for $725 million. A real estate investor from Beijing took part in the $1.4 billion purchase on the General Motors office tower, too.
Anbang Insurance paid $1.95 billion for a 1,232-room Hilton Worldwide, which by the way was one of the highest prices ever paid for a hotel. That transaction highlights just how explosive international demand is for hotels and other Class-A properties in the U.S.
I even watched as Greenland Holdings Group took a 70% stake in a $5 billion Atlantic Yards project, and acquired a 25,600 sq. meter site in Los Angeles from the California State Teachers’ System with plans to build a hotel, offices, and high-end homes.
I could go on… But the opportunities being offered in the U.S. will continue to attract very heavy interest. Don’t fear the bubble the Federal Reserve believes exists. Follow the smart money into commercial real estate.