Foreign investors in real estate say they remain committed to the U.S. as their preferred real estate investment opportunity. The sentiment is underscored by a dramatic increase in the number of respondents identifying the U.S. as the country providing the best opportunity for real estate capital appreciation, according to the results of the 18th annual survey conducted among the members of the Association of Foreign Investors in Real Estate (AFIRE).
The survey was conducted in the fourth quarter of 2009 among the association's nearly 200 members. Survey respondents own more than $842 billion of real estate globally including $304 billion in the U.S. The survey was conducted by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business.
In this year's survey:
— 51 percent of respondents identify the U.S. as providing the best
opportunity for capital appreciation;
— this compares to 37 percent in 2008, 26 percent in 2007, and 23
percent in 2006;
— the last time respondents' perceptions for U.S. real estate were this
strong was in 2003, when the percentage once again reached 51 percent.
— two thirds of respondents plan to increase their investment in the
U.S. in 2010 compared to 2009;
As they did last year, survey respondents also express a firm interest in multi-family as their preferred property type followed by office, industrial, retail and hotel properties.
Survey respondents have also pushed their projections for the recovery of the U.S. commercial real estate market back by six months:
— in the June 2009 mid-year survey, half the respondents said they
expected recovery by or before the second quarter of 2010;
— in the 2010 annual survey, half the respondents say they expect the
recovery by or before the fourth quarter of 2010.
But, optimism about the state of the U.S. real estate market remains strong:
— 33 percent of survey respondents say they are more optimistic about
the U.S. real estate market than they were in June 2009;
— 63 percent say their perspective has not changed;
— 6 percent say they are more pessimistic.
AFIRE members have a common interest in preserving and promoting investment in cross-border real estate. Founded in 1988, AFIRE currently has nearly 200 members representing 21 countries. AFIRE is located at 1300 Pennsylvania Avenue, NW, Washington, D.C.; (202) 312-1400. www.afire.org.