Foreigners Pump $14.4 Billion in U.S. Industrial Real Estate Assets
According to new data from CBRE Research and Real Capital Analytics, foreign property investors made $14.4 billion worth of U.S. industrial real estate acquisitions in 2018, up a whopping 152% year-over-year due to several large entity-level deals and 29% above the average volume since 2015.
Foreign investors accounted for 21% of total U.S. industrial real estate investment volume in 2018. Investment from Canadian and Chinese buyers reached an all-time high, accounting for 70% of last year's total foreign investment in U.S. industrial real estate.
Jack Fraker, CBRE's Global Head of Industrial & Logistics, Capital Markets said, "The U.S. industrial and logistics sector continues to benefit from structural changes, such as online retailing and evolving consumer behaviors, that are transforming global supply chains. E-commerce operators require up to three times more space than traditional warehouse users due to a greater diversity in products handled and the need to have them immediately accessible. Global real estate investors have caught on and are eager to add U.S. industrial assets to their portfolios."
The top-three U.S. industrial markets for foreign investment were Los Angeles, Dallas/Ft. Worth and Chicago, with a combined $2.4 billion in 2018. Even when excluding large entity-level transactions (which vary greatly from year to year and can skew annual comparisons), the average annual volume of foreign investment in U.S. industrial real estate during the past five years rose by 68%, indicating strong demand for individual industrial properties and portfolios.
A total of 161,875 U.S. properties with a foreclosure filing during the first quarter of 2019, down 23 percent from the previous quarter and down 15 percent from a year ago to the lowest level since Q1 2008.
Zillow is reporting this week that a limited U.S. housing inventory and rapid price appreciation have kept sellers firmly in the driver's seat for several years as the United States recovered from the housing market collapse in 2008.