Foreign Companies Invest in U.S. Real Estate

Last year, foreign direct investment (FDI) had record highs. Chinese companies doubled their 2012 investment to $14 billion. Despite these big headlines, the media only reported a small amount of the foreign investment pouring into U.S. real estate.

The media overlooked the foreign investors who partner with domestic operators. Real Capital Analytics looked at deed transfers to determine transfers to foreign investors. Domestic partners have numerous benefits to foreign investors. These benefits include safe and stable returns, the ability to leverage the expertise of a local partner and the ability to mitigate transfer taxes, property tax hikes and higher property taxes.

The domestic partnership not only benefits the foreign investor, but for U.S. operators the partnership offers greater access to capital, and the ability to move quickly in the competitive market. U.S. real estate companies are traveling to the Europe, Middle East, and Middle Asia markets to woo potential foreign investors. Blackstone, Tishman Speyer, Brookfield, and General Growth Properties are some of the companies investing in domestic partnerships. Foreign investors are pulling their money from their home country and placing their funds in U.S. real estate. These investors are a strong asset class for the long term. Since their main goal is to invest in a perceived “safe-haven,” foreign investors have lower return expectations and a longer time horizon. The return on the investment is sometimes their secondary goal. 

 

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Nick Banks

Nick created Front Street Commercial Real Estate Group in 2002 and spent the first eight years developing and acquiring office and retail projects in South Florida as well as North Central Florida. In 2010 the focus of the firm was shifted to primarily serve third party clients and perform brokerage, property management and mortgage banking functions. Nick has personally developed and acquired nearly 200,000 square feet of office and retail properties in markets throughout Florida. Prior to founding Front Street, Nick was the Director of Finance and Dispositions for Stiles Corporation in Fort Lauderdale where he financed and sold over $500 million in commercial real estate. Before joining Stiles, Nick was an Associate Director at GE Capital Real Estate where he sourced over $200 million in financing throughout Florida. Nick is a graduate of the University of Florida with a degree in Finance and a concentration in Real Estate. He serves as a board member and current vice-chair for the United Way of North Central Florida where he also chairs the Development Committee. Nick is actively involved with the Gainesville Area Chamber of Commerce where he serves as a board member and committee member for the Council for Economic Outreach. He is also a recent graduate of Leadership Gainesville which is a year long leadership program hosted by the Chamber. He is a member of Grace United Methodist Church where he has served as finance chair and as a member of the leadership council. Nick serves as an advisory board member of the University of Florida Bergstrom Center for Real Estate Studies. Nick was recently named chair of the Gainesville committee for the North Florida chapter of Urban Land Institute (ULI). He is a licensed real estate broker in the State of Florida and is a long time member of the International Council of Shopping Centers.

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