The What and Where of Foreign Investment

By Pius Leung

Foreign investors’ preference of commercial real estate investments is spread evenly among office, multi-family, hotel, industrial and retail assets, according to the 2006 Annual Survey of AFIRE. Investors are generally looking for attractive, high-quality properties with credit tenants on long-term leases with limited rollover exposure.

In the same survey, members of AFIRE indicated London, New York City, Paris, Washington D.C. and Tokyo were the top five global cities for real estate investment. The top five U.S. cities for real estate investment were New York City, Washington D.C., Los Angeles, San Francisco and Seattle.

However, investors are experiencing difficulty in located investment opportunities in the major U.S. cities. Therefore, investors are starting to look for properties in second tier markets including: Austin, Texas; Atlanta; Boulder, Co.; Colorado Springs, Co.; Denver; Dallas; Houston; Memphis, Tenn.; Orlando, Fla; and San Diego, as well as various coastal markets in Florida.