South Florida has received more than 60 percent of the cross-border capital entering the state in the past nine years
Miami, FL – July 19, 2016 – Over the past two years, cross-border capital flows into the U.S. have risen dramatically and in 2015 foreign investment in South Florida commercial real estate hit its highest rate in at least nine years, according to a new report by CBRE Group, Inc. Last year, Florida ranked fourth in the nation in terms of cross-border investment volume and the state improved to rank third in Q1 2016. Foreign buying is projected to cool slightly in 2016 relative to 2015, but remains elevated relative to historical rates.
The report, “Florida: A Destination for Global Capital,” describes the factors that are attracting foreign investors to Florida – factors including the state’s rapidly growing population and economy, the powerful global brand of its major cities, and strong cultural and economic ties to Latin America and beyond. In 2015, cross-border capital flows into Florida reached $4.3 billion, a high-point for the cycle thus far and up 85% over 2014. In South Florida, foreign capital surged in 2015 with nearly $2.6 billion in sales volume. The 2015 total represents a 65% increase over the previous year.
“Florida has been an attractive destination for foreign buyers thanks to its high rates of job creation and economic growth,” said Quinn Eddins, Director of Research and Analysis, CBRE Florida. “And perhaps equally important is the fact that Florida cities, especially Miami and Orlando, have strong global brands and are familiar to investors all over the world. With their strong economic performance and international renown, it is not surprising that Florida’s cities have been so successful at attracting foreign investment to their commercial real estate markets.”
According to the report, foreign investment in Florida is expected to moderate compared to 2015, but will remain elevated relative to historical transaction volumes. Heightened uncertainty in the global economy will enhance the allure of U.S. markets as safe havens for global capital. Primary gateway markets will receive the most interest from foreign buyers, but Florida, and Miami in particular, should benefit as well.
The report lists the following trends in cross-border investment in South Florida real estate:
o Canadian investors have been the most active, followed by significant investment activity from Germany and Spain.
o Since 2007, South Florida’s retail and hotel markets have each attracted nearly $2.4 billion in cross-border capital, more than any other property type. In 2015, office properties attracted the greatest cross-border sales volume with $630 million in acquisitions.
o Miami leads the region both in terms of sales volume and transaction count, followed by Broward County and Palm Beach County. Miami has also experienced higher average annual growth in cross-border capital since 2007.
o Chinese developers established a foothold in Miami in 2014, increasing familiarity with the market among Chinese investors. More Chinese capital is expected to follow as financial market liberalization at home allows investors to increase the international diversification of their portfolios.
o Foreign investment in Broward County commercial property reached $560 million in 2015, marking the second consecutive year in a row in which foreign capital flows exceeded half a billion dollars.
o Since 2007, Canadian investment in the Broward County market has reached $1.2 billion, representing nearly 49% of all cross-border investment during the period.
o Cross-border investment in Palm Beach County real estate increased significantly in 2015 but not enough to exceed the previous peak in 2007 when foreign investment reached nearly $320 million.
o Canadian buyers have been the most active in the Palm Beach market since 2007, having invested over $427 million, or 29% of the total foreign capital investment in the market.
o Since 2007, South Florida’s retail and hotel markets have each attracted nearly $2.4 billion in cross-border capital, more than any other property type. In 2015, office properties attracted the greatest cross-border sales volume with $630 million in acquisitions.
o Miami leads the region both in terms of sales volume and transaction count, followed by Broward County and Palm Beach County. Miami has also experienced higher average annual growth in cross-border capital since 2007.
o Chinese developers established a foothold in Miami in 2014, increasing familiarity with the market among Chinese investors. More Chinese capital is expected to follow as financial market liberalization at home allows investors to increase the international diversification of their portfolios.
o Foreign investment in Broward County commercial property reached $560 million in 2015, marking the second consecutive year in a row in which foreign capital flows exceeded half a billion dollars.
o Since 2007, Canadian investment in the Broward County market has reached $1.2 billion, representing nearly 49% of all cross-border investment during the period.
o Cross-border investment in Palm Beach County real estate increased significantly in 2015 but not enough to exceed the previous peak in 2007 when foreign investment reached nearly $320 million.
o Canadian buyers have been the most active in the Palm Beach market since 2007, having invested over $427 million, or 29% of the total foreign capital investment in the market.
For more details from the report, visit www.cbre.com/en/research.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
