According to the Bureau of Economic Analysis at the Department of Commerce, more than $450 billion was invested into the American economy by foreign investors during 2016. A significant portion of this investment has been in commercial real estate in major California markets, and some experts predict that the trend will likely continue. Foreign investors have placed high value on commercial real estate in 2016 and beyond due to steady job creation and business expansion.
While much of the focus from foreign investors has been in major markets like Los Angeles, New York and Chicago, opportunities exist in smaller cities and suburban areas throughout the country. These markets have high-value office parks, commercial shopping complexes and modest-sized commercial buildings for relatively low prices. For some foreign organizations, investing in commercial real estate debt is seen as a less risky proposition than direct property purchases.
The United Kingdom, Canada and Japan were the top three sources of foreign investment in the United States during 2016, but China represented the biggest source of commercial real estate investment. Chinese investors are part of some of the biggest real estate transactions, often worth more than a billion dollars each, taking place in the country.
Investors looking to put their money into commercial real estate face a lot of challenges. Each investment requires research and due diligence as well as a careful analysis of potential market risks. Representation from a lawyer who focuses on the legal aspect of real estate transactions may make the process easier and less risky. It’s the responsibility of a lawyer to ensure that their client’s financial rights are protected during every step of the process.
