According to CBRE, Asian investors will spend more on multifamily properties in the United States in 2014 than at any other time in history.
So far in 2014, Asian buyers have made a large rise in investment volumes in US multifamily, with $522 million in transactions completed from January to August. This figure has already exceeded the full-year total for 2012 ($356 million) by a significant margin, and it is on track to exceed the total for 2013 ($537 million). apartment for sale
The most important shift in buyer nationality in 2014 was the increase in buying activity by Asian buyers, especially from Japan and China. As purchases by European and Middle Eastern countries decline marginally, Asian buyers now account for 18 percent of cross-regional multifamily investment in the United States, a rise of 8%. Canada continues to be the most popular destination for international multifamily investment in the United States.
Since January 2013, Asian investors have targeted a variety of multifamily properties in the United States, with San Francisco receiving the most investment, totaling more than $326 million, followed by Los Angeles ($252 million) and New York ($175). Compared to investors from the rest of the world, who made at least 20% of their acquisitions in portfolio properties, Asian investors have been concentrating on single assets, with only one of the 27 multifamily acquisitions in this time span being a portfolio.
CBRE Global Capital Markets Executive Director Marc Giuffrida tells The World Property Journal, "Residential real estate is a well-known asset class in Asia, and we're seeing a lot of interest from China, Japan, and Hong Kong in US markets. Investors are attracted to the relative performance and availability of multifamily assets in the United States as opposed to home markets. This is reflected in the breadth and scope of capital seeking to invest in multifamily. Although Asian capital isn't making the biggest trades right now, there is plenty of interest, particularly in the smaller lot sizes where private wealth can participate."
CBRE Multifamily's Senior Managing Director, Peter Donovan, said, "Asian investors are drawn to markets with a high concentration of fellow nationals, as well as US metropolitan areas that closely mirror the investment climate in major Asian cities like Beijing or Hong Kong. Densely populated cities like San Francisco, Los Angeles, and New York are obvious options. Multifamily opportunities are also being considered by investors in cities such as Seattle, Salt Lake City, Jacksonville, Orlando, and South Florida, where the strategy is to target areas near universities or other enclaves that attract a disproportionate number of Chinese nationals, whom developers believe can be enticed as potential tenants or condo unit investors."
Since January 2013, cross-border investors have targeted a variety of multifamily properties in US locations, with the majority of cross-border multifamily investment in 2014 occurring in primary and secondary metros. In comparison to 2013, when secondary and tertiary metro acquisitions dominated the first eight months of the year, secondary and tertiary metro acquisitions dominated the first eight months of this year. In 2014, cross-border buyers opted to buy newly developed core and core-plus stock, compared to a much greater focus on slightly older core-plus and value-add product in 2013.