Foreign Interest in Industrial Real Estate Continues to Grow
NAI Global Newslink | June 2019
Out of all of the CRE sectors available, overseas investors indicated they are most interested in acquiring industrial assets. Foreign interest honing in on industrial real estate is a trend that has remained strong over the past few years and is set to continue throughout 2019 and beyond.
According to a survey conducted by the Association of Foreign Real Estate earlier this year, a whopping 79% of foreign investors stated they would like to increase their exposure to U.S. industrial spaces.
So what exactly is it about America’s industrial real estate that attracts so much attention across the globe? Here’s what CRE professionals need to know about this trend in order to stay at the top of their game.
The United States is home to many of the hottest cities in the global market, so it’s no question why foreign investors are highly interested in conducting business here. According to NRE, Boston, New York, San Francisco, and Seattle compose four out of the top five global cities where international real estate investors would like to increase their exposure.
Besides these, the country also hosts many other high ranking markets for CRE, including Las Vegas, Los Angeles, and Chicago. These areas are extremely popular and have sustained the test of time, which makes investing in these regions very attractive.
High Profit Margins
When comparing industrial investment to other CRE facets, it becomes clear why foreign investors are heavily leaning towards the industrial side of the business. Industrial real estate brings back incredibly large profit margins and yields unparalleled returns.
Not only is it profitable, but industrial real estate is also convenient for overseas parties. Being a landlord of an industrial property is far more hands-off than owning a multi-family, hotel, or retail development.
Most industrial leases are business-oriented, placing nearly all of the responsibility on the inhabitants. Due to the growing interest in the industrial sector, it’s also relatively easy to get funding for the purchase of an industrial property.
This investment approach allows foreign parties to make a huge profit while still allowing them to focus on expanding other areas of their business.
Security and Stability
The United States’ industrial real estate market is incredibly secure and stable due to the changing scope of global retail and consumerism. More and more companies are looking to invest in industrial properties in order to keep up with the growing demands of the business.
The contemporary consumer values automation and instant gratification, all of which are by-products of our ascension onto the digital platform. In order to deliver their products to clients more quickly, companies are needing to open up warehouses all around the country.
Out of all of the available facets of CRE, industrial real estate stands as the most promising for overseas investors. The profits are wide, stability is ensured, and there are a plethora of established markets thriving in the United States.
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