Trans-Pacific Capital Flows: Asia rises as major source of cross-border capital for U.S. real estate investment

April 28, 2015

 

NEARLY ONE-QUARTER OF AMERICA’S CROSS-BORDER CAPITAL COMES FROM ASIA

  • Asian investors are a major supplier of capital for U.S. real estate, acquiring $7.0 billion worth of U.S. assets in 2014 and accounting for 25% of year’s cross-border capital flows.
  • This trend has continued in 2015 with Asian investors purchasing $2.75 billion of U.S. real estate in Q1 2015.
  • Asian investors are displaying a preference for office and hotel assets.
  • Coastal markets are primary targets—Los Angeles, New York, Washington, D.C., and San Francisco accounted for 75% of 2014 activity.
  • Asian investors are attracted to U.S. real estate because in domestic markets, pricing for real estate remains high, yields remain low, and economic conditions are more challenging.
  • By comparison, the U.S. offers a more attractive yield environment, with strong property fundamentals and an economy that is comparatively strong.


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