Real Capital Analytics Dissects Foreign Investors’ Transactions in 2015
- Foreign investors were involved in direct property purchases totaling $91.1 billion in 2015, a record year for these investors. These transactions accounted for 17% of all deal volume in 2015, up from an average of 10% the previous four years, according to a recent report by Real Capital Analytical.
- The top six foreign investors were active in purchases of industrial sector mega-deals. Foreign direct-purchases of industrial property totaled $27.3 billion. This figure represents nearly 1/3 of all foreign property investment in the U.S. while this share averaged only 6% in the previous 10 years.
- The office sector represented the largest source of foreign capital in direct property purchases in the U.S. with deals totaling $27.5 billion in 2015. The apartment sector finished in third place at $15.9 billion. The analytics show that the growth in apartment activity was stronger than in any other sector except industrial activity, which rose 175% from a year earlier.
- Miami is ranked #11 among the top U.S. market destinations for cross-border investments, according to RCA. Miami saw $2.1 billion in acquisitions, which represents 25% of all cross border investments in the United States last year.
Two noteworthy factors are revealed when comparing transaction trends in the United States to other parts of the world. First, U.S. investment markets are far more robust than any other world market. Second, the U.S. is the only market to record significant volume gains in 2015. The U.S. accounted for roughly 50% of global transaction volume involving income-producing real estate in 2015, up from 42% in 2014. Cross-border capital flows to the U.S. have been increasing at such a rapid pace because of the strength of the U.S. economy and its property investment markets relative to other markets globally. Foreign investors overwhelmingly believe the U.S. offers the best opportunity for capital appreciation, RCA reported.