Canadian investors topped the list of foreign buyers of U.S real estate this year as they have for a decade. Among those was Toronto based Starlight Investments which purchased apartment complexes in the suburbs of Atlanta and Phoenix through its U.S fund.
In the major markets of New York, San Francisco, Washington, Los Angeles, Chicago and Boston, commercial rents are already reaching record heights, and there’s less room to grow, so some foreign real estate investors are putting money into the next best markets where they see yields rising.
According to data from CBRE, Canada, China and Germany were the top foreign investors in U.S. commercial real estate this year and are making more deals outside the biggest metro areas. The most popular second tier markets for foreign capital this year include Dallas, California’s Inland Empire and Philadelphia.
CBRE said that the biggest growth was in Philadelphia, jumping 516 per cent in the first three quarters from the same period a year ago. Also posting big year on year gains were the Inland Empire, Phoenix, New York City’s boroughs, San Diego, California, Raleigh/Durham in North Carolina, and Columbus, Ohio. They were helped by stronger economic growth and local universities to supply the talent needed by investors.
Starlight bought a majority stake in a 250-unit, 35.5-acre (13.6 hectare) apartment complex in the suburbs of Atlanta for US$33 million this year. The property, just minutes from an interstate highway that runs from Alabama to Virginia, includes access to a car wash, swimming pool and a dog park. The company also acquired a 335-unit luxury apartment complex in a wealthy suburb of Phoenix. The newly completed property is fitted with a two-level fitness center, poolside cabanas and a coffee bar.
Starlight’s Mehta said that we still believe in the fundamentals of U.S. multifamily on a risk adjusted basis: The returns are healthy and we’ve increased our number of investment vehicles.
Fulya Altunyay realestatecoulisse.com