According to a recent survey by the Richard J. Rosenthal Center for Real Estate Studies at REALTOR University and the National Association of Realtors, international investments in commercial real estate is dominated by Asian interests in both Canada and the U.S. The survey was also done in conjunction with the Canadian Real Estate Association and with assistance from the CCIM Institute of Real Estate Managers.
This survey found that 47 percent of Canadian respondents and 41 percent of those in the U.S., indicated that their international clients were from Asian countries.
Some surprising stats
NAR President, Chris Polychron, states, “commercial real estate has become a global industry and Realtors from across the U.S. and Canada now regularly serve clients from all over the world. This survey proves the fact that while all real estate is local, not all investors are local.”
While this statement may not be a completely new one, the figures in the study may surprise you. For example, 45 percent of Realtors® who practice commercial real estate in Canada noted an increase in international clients; 36 percent for the U.S.
Rising number of international clients
The survey found an increase in the percentage of international clients. In the U.S., 22.5 percent of international clients came from Europe, 21 percent from Latin America, and 20 percent from the Middle East.
Whereas, in Canada, 18 percent of international commercial real estate investment came from the Middle East, 17 percent from Europe, and 5 percent from Latin America. It is important to note that the heaviest cross-border investment in commercial real estate continues to be between the U.S. and Canada.
Asia investing big time in U.S.
These international investors brought with them a significant amount capital: nearly $13 billion in the latter half of 2014 for the U.S. Investors from Asia invested $5.7 billion in real estate, $4.8 billion came from Europe, $1 billion came from Oceania, and $390 million came from Latin American investors.
Another changing aspect the survey found, was a changing demand for office space in both the U.S. and Canada. Commercial clients are seeking more flexible office spaces, reducing the amount of personal space for workers and increasing the amount of communal space; 40 percent of Canadian respondents and 45 percent in the U.S. said their clients are looking for more open space in their offices.
These office locations are also seeing a shift: in Canada a majority of investors are looking at property in metropolitan areas with populations of more than 1 million. However, investors in the U.S. have begun moving away from larger markets into secondary and tertiary markets.
The bottom line
The bottom line: the tides are shifting in commercial real estate for who will be investing and where the most desired office spaces will be.
#BigMoney
