{"id":1004075055,"date":"2013-05-28T11:37:45","date_gmt":"2013-05-28T19:37:45","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004075055"},"modified":"2022-12-05T11:20:44","modified_gmt":"2022-12-05T19:20:44","slug":"mipim-special-series-part-two-focus-on-the-us","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/mipim-special-series-part-two-focus-on-the-us\/","title":{"rendered":"MIPIM Special Series\u2014Part Two: Focus on the US"},"content":{"rendered":"<p><em style=\"font-size: 13px;line-height: 19px\"><a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/05\/MIPIM-part-2-photo.jpg\"><img loading=\"lazy\" decoding=\"async\" data-attachment-id=\"1004075062\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/mipim-special-series-part-two-focus-on-the-us\/mipim-part-2-photo\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/05\/MIPIM-part-2-photo.jpg\" data-orig-size=\"400,300\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;}\" data-image-title=\"MIPIM part 2 photo\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/05\/MIPIM-part-2-photo.jpg?w=400\" class=\"alignright size-medium wp-image-1004075062\" title=\"MIPIM part 2 photo\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/05\/MIPIM-part-2-photo.jpg\" alt=\"\" width=\"300\" height=\"225\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/05\/MIPIM-part-2-photo.jpg 400w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/05\/MIPIM-part-2-photo.jpg?resize=300,225 300w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a>Associate editor Eliza Theiss presents a <a href=\"https:\/\/www.commercialsearch.com\/news\/regions\/international\/mipim-special-series\/\">three-part series<\/a> of reports on worldwide real estate based on presentations at the MIPIM world property market in March.\u00a0<\/em><em style=\"font-size: 13px;line-height: 19px\">Additional reports focused on<\/em><em style=\"font-size: 13px;line-height: 19px\">\u00a0<\/em><em style=\"font-size: 13px;line-height: 19px\"><a href=\"https:\/\/www.commercialsearch.com\/news\/regions\/international\/mipim-special-report-part-one-focus-china\/\">China<\/a><\/em><em style=\"font-size: 13px;line-height: 19px\">\u00a0<\/em><em style=\"font-size: 13px;line-height: 19px\">and <a href=\"https:\/\/www.commercialsearch.com\/news\/regions\/international\/mipim-special-series-part-three-europe\/\">Europe<\/a><\/em><em style=\"font-size: 13px;line-height: 19px\">.<\/em><\/p>\n<p>&nbsp;<\/p>\n<p><em>By Eliza Theiss, Associate Editor<\/em><\/p>\n<p><em>\u201cWhy is the United States so attractive to global investors?\u201d<\/em> was one of the big questions presented at MIPIM 2013. The answer boils down to economic health. While China and Europe both offer viable real estate investment targets, the U.S. economy continues to outperform.<\/p>\n<p>Christopher Ludeman, president of the capital markets division at global services provider CBRE Group Inc., characterized the United States\u2019 appeal with the lyrics of country legend Johnny Cash: \u201cThe cleanest dirty shirt.\u201d He noted however, that the market\u2019s pull really goes further than its being the lesser of two (or three) evils in the context of a global and heavily interconnected investment market. \u201cThe fundamentals of business are starting to improve, there\u2019s an uptick in job growth and we haven\u2019t had a supply problem \u2013 there has not been an overhang of space to really be of concern, and the consumer has been relatively resilient,\u201d Ludeman enumerated. With offshore capital always looking to diversify yield, it adds up to an objectively optimistic outlook.<\/p>\n<p>The World Bank measured the U.S. GDP at just under $15 trillion in 2011, and its jobs market is on the rebound, with a monthly recovery of 150,000 jobs reported in 2012 and an expectation of reaching pre-recession levels by the end of 2014. In the meantime, China\u2019s GPD totaled $7.3 trillion in 2011, and while it is currently sporting white-hot growth numbers, it is showing signs of a slowdown. Plus, it is working through decades\u2019 worth of development standards and legislation improvements, as well as population crisis and ever-growing environmental issues.<\/p>\n<p>And the Euro zone can\u2019t seem to catch a break. Greece is far from the only truly distressed European country. In fact, according to the latest numbers, even Europe\u2019s economic powerhouses, such as the Nordic countries, are getting stuck in a lagging market\u2014an alarming trend, as these were the economies pulling up their struggling European neighbors. France, for example, is dangerously close to going off the cliff in 2013.<\/p>\n<p>The U.S. also scores high in political stability. While that might sound surprising, considering the bipartisan bickering in Washington and national debt crisis, given democracy indexes on the decrease globally, failed governments in the Euro zone and China\u2019s still heavily politicized and government-controlled business arena, the U.S.\u2019s democratic status and stable government are assurances of safety for foreign investors, another aspect stressed by Ludeman: \u201cThere is an interest in people to just protect that capital. They are finding that because of the transparency, it is a relatively safe haven.\u201d<\/p>\n<p>Last year, the U.S. real estate market attracted more than $25 billion from crossborder investors, the panel noted. Canadian investors supplied the brunt of the capital, with $9.1 billion, while a mix of European and Middle Eastern investors contributed a total of $11.3 billion (a dramatic increase over previous years), with European investors bringing in around $8 billion of the total sum. Asian players plied $4.4 billion into U.S. assets, a slight decrease compared to 2011 but still far beyond previous years\u2019 capital flow from Asia, according to a report from the Association of Foreign Investors in Real Estate presented during the panel. While South American investors\u2019 contributing $500 million doesn\u2019t seem like such a large impact, \u201cit is interesting, because it is increasing quite dramatically at the moment,\u201d noted moderator Simon Mallinson, executive managing director of EMEA for Real Capital Analytics Inc., adding, \u201cFrom the beginning of the year, we are starting to see some pending interest from that market.\u201d<\/p>\n<p>\u201cThere is clearly an increase in optimism about the U.S.,\u201d observed AFIRE chief executive James Fetgatter. Results of the association\u2019s 2012 market survey found that 39 percent of respondents were more optimistic about the U.S. than they were a year ago, he said, and almost none were more pessimistic. Furthermore, they ranked U.S. cities high on global market status, selecting U.S. cities as four of the five most important globally. \u201cThat\u2019s the first time that has ever happened,\u201d Fetgatter emphasized. The cities named most often as attractive markets included New York, Washington, D.C., San Francisco and Houston, along with London, a perennial favorite.<\/p>\n<p>The U.S. also ranked at the top for capital appreciation\u2014while China received no votes, quite a change from 2007, when they were tied. The U.S. ranking is timely, since tightened bank loan standards have limited domestic involvement, making the real estate market ripe for further capital influx. But expect to see a change in the foreign approaching to structuring transactions, since the fund-of-funds approach many international capital sources pursued during the economic downturn proved less beneficial than hoped. Ludeman anticipates their \u201cdealing more at the asset level, either through joint ventures or partial interest sales.\u201d He noted, however, that in many cases international capital is hard to track due to collaborations with domestic sponsors.<\/p>\n<p>According to Bernard Haddigan, founding partner of Haddigan Capital, global capital is typically being placed through U.S. advisors, with most of the capital invested in the post-recession years concentrated in the top 10 percent of asset quality. With cap rates so compressed, though, the appetite for risk taking is growing, and capital placement \u201cis going into incrementally less desirable geographies.\u201d Product targets are also diversifying in pursuit of demographic shifts, with growing interest in the Baby Boomer and Gen Y segments, as well as the increasingly potent Asian and Hispanic constituencies, increasing demand for multi-family and seniors housing.<\/p>\n<p>\u201cThe capital markets are opening up again,\u201d added Haddigan. \u201cIt\u2019s almost like going back to 2003-2004, with commercial mortgage-backed securities, securitized mortgages, life insurance companies\u2014it\u2019s almost like nothing\u2019s changed, like we\u2019re back to 2003 again, and people are thinking in the next three to four years we\u2019re going to have a tremendous amount of cheap capital financing, which can create opportunities for investment in the U.S.\u201d<\/p>\n<p>The U.S. is expected to remain the leading global economy and continue to provide a safe haven from political volatility for foreign investors. Although pre-recession levels of economic growth have yet to be reached, wrap-up conference moderator Francois Ortalo-Magn\u00e9, the Albert O. Nicholas Dean of the Wisconsin School of Business, termed the outlook for the U.S. real estate market \u201cbeyond cautious optimism.\u201d With the market\u2019s improvement, expect to see further foreign investment.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Associate editor Eliza Theiss presents a focus on foreign investment in U.S. real estate, the second in a three-part series of reports on worldwide real estate based on presentations at the MIPIM world property market in March.<\/p>\n","protected":false},"author":755,"featured_media":1004075062,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[16,21783,21742],"tags":[],"class_list":["post-1004075055","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-international","category-investment","category-latest"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>MIPIM Special Series\u2014Part Two: Focus on the US - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/mipim-special-series-part-two-focus-on-the-us\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"MIPIM Special Series\u2014Part Two: Focus on the US\" \/>\n<meta property=\"og:description\" content=\"Associate editor Eliza Theiss presents a focus on foreign investment in U.S. real estate, the second in a three-part series of reports on worldwide real estate based on presentations at the MIPIM world property market in March.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/mipim-special-series-part-two-focus-on-the-us\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2013-05-28T19:37:45+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-05T19:20:44+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/05\/MIPIM-part-2-photo.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"400\" \/>\n\t<meta property=\"og:image:height\" content=\"300\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Suzann D. 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