Foreigners Like U.S Real Estate, Even If We Don't

Despite reluctance here in the residential real estate market, foreign investors see the U.S. commercial real estate market as their No. 1 choice for investment this year, according to a survey of foreign real estate investors. The Association of Foreign Investors in Real Estate (AFIRE) survey showed that the United States drew four times as many votes as the second-ranked Britain for appreciation in 2011. Approximately 65% of those surveyed said they believe the U.S. offers the best chance for price appreciation. "As the fear of a double-dip recession has faded, investors are becoming more enthusiastic about the prospects for the U.S. economy and are taking aim at real estate investment opportunities in the U.S.," said James Fetgatter, AFIRE chief executive. Foreign investors ranked apartments as No. 1, retail as No. 2, and hotel as No. 3. Office, a typical favorite among institutional investors was fourth, and industrial was last. "You talk to economists, and they're saying that we're going to have 9 percent or 8 percent unemployment for the next several years. That doesn't bode well for offices," Fetgatter said. Those surveyed own more than $627 billion worth of real estate around the world. $265 billion of that is in the United States. 72% said they plan to increase investment this year in Amerca. "The increase in the interest and perception of the U.S. was a surprise," Fetgatter said. New York and Washington are among the top places in the country, with Boston ranking third. "They really are focused on New York and Washington and not the entire U.S.," Fetgatter said. "They're not hitting a lot of the market yet."