The long and short of real estate investing is buy low, sell high. Or conversely, whatever goes up must come down, or does it? In volatile realty markets there are...
CRE Sales by Foreign Nationals Account for 20% Total
CRE Real Estate Hits the Roof With Foreign National Investors
The foreign investment for CRE real estate has driven up to almost 20% of the nationwide total of business property and CRE investments. American real estate is a secure investment to Asian and European buyers. Alternate to the glut of overseas residential cash home buyers, the CRE market often facilitates other forms of financing like EB5 business loans for citizenship.
Foreign national investors look to the base lower prices of luxury multifamily apartments in New York, Los Angeles and San Francisco compared to London, Paris, Shanghai and Moscow.
Overseas foreign nationals can apply for citizenship under the EB5 program provided the business development hires American citizens and remains a viable business for years.
As foreign investments are rapidly changing the property ownership and property valuations in many areas what is the long range forecast of CRE sales? Many industry insiders point to the fact that foreign investment owned properties are then sold back to US citizens in the form of tenancy. In other words, the landlord for your creative space office, rental property or apartment is more often than not a foreign investor…
In specific areas like Arcadia a small suburb east of Los Angles in Southern California the place is “cash buyer central” for Asian investors. These are primarily luxury home owned residences paid with “all cash not a problem”. Fanning out from the foreign national luxury home buying spree in California comes the commercial real estate boom in the area. As business and income property comes into view the next stage is the CRE purchases in the area.
In terms of demographics Florida is the key state for foreign national investors. California and Texas are high on the list for the Chinese buyers, where NYC and Florida are the main contenders to the European market.
What is the endgame for the American real estate investor competing with the all cash buyers? Probably using your skills to get out in front of a good business property before the masses rush in. Obviously the CMBS market will continue to grow in sales from every sector but take these next words in as a caveat or warning to the US economy.
A representative for a large foreign national investment once told me quite casually:
“ I need foreign national loans for my group of 250 multi-millionaire investors, their ultimate goal is to collect rent from everyone in the USA. 70% down is not an issue, we just need a US company to represent the investors on paper ”…..
I politely said goodbye and hung up the phone thinking, are we shooting ourselves in the foot here?