Foreigners Are Unloading CRE Assets — In Miami, At Least
For the past seven years, foreign investors have steadily moved away from buying pre-construction condos – as sale prices kept rising – and turned their attention to CRE properties in Miami. Now, they are cashing out, putting their properties on the market just as the real estate cycle nears the end.
Foreign investors are selling to capitalize on the market’s rapid appreciation in the last five years. Based on where we are in the cycle, they no longer expect a significant appreciation.
A perfect example is a client of mine from Argentina who has been buying commercial properties in South Florida for nearly a decade and is now selling a single-tenant building occupied by Starbucks at 7840 NW 25th St. in Doral for $3.86 million. The Starbucks recently signed a 10-year extension with four five-year renewal options. He is also trying to capitalize on the sale of a 2.6-acre parcel in Sunrise that he acquired during the recession years. The commercial development site with a price tag of $3 million is located at 1213 NW 136TH AVENUE near the American Express’ regional headquarters.
Another example highlighting this trend is Metro Capital Partners, which invests capital from Colombia in Miami. Several months ago, Metro sold the Tamiami Metro office building in West Kendall for $7.9 million after acquiring it in a 2014 distress sale for $3.2 million.
For the most part, these investors are selling to either buy more assets in South Florida or pay down debt on other properties. They continue to see our region as a safe place to grow and protect their capital. They still favor single-tenant assets like Starbucks, Walgreens and bank branches. They are also interested in income-producing assets that can become development sites in the next real estate cycle.