The U.S. real estate market today offers a stronger investment opportunity than it has in the last 10 years, according to the Association of Foreign Investors in Real Estate (AFIRE).
The association’s 19th annual survey, highlighting trends in international real estate investment, reveals that nearly 65 percent of respondents indicate the United States offers the best potential for capital appreciation. That’s 54 percentage points over second-ranked China.
AFIRE says this is the highest positive response to the question of the U.S. market’s potential since it was first asked in 2000, and a dramatic reversal from 2006 when only 23 percent chose the United States as the best global investment opportunity.
“As the fear of a double-dip recession has faded, investors are becoming more enthusiastic about the prospects for the U.S. economy and are taking aim at real estate investment opportunities in the U.S.,” said James A. Fetgatter, chief executive of AFIRE.
“However, their strategy is more akin to a rifle than a shotgun,” Fetgatter added. “Except for multi-family housing, they are not scattering their interest throughout the U.S. but rather narrowly targeting it to New York City and Washington, D.C., to an even greater extent than in previous years.”
New York City and Washington, D.C., scored almost four times higher than third place Boston among the top five U.S. cities for foreign real estate investment. San Francisco and Los Angeles rounded out the list.
Multi-family properties remain investors’ first choice in 2011, followed by retail, hotel, office, and industrial real estate.
Seventy-two percent of respondents plan to invest more capital in the United States in 2011 than they did in 2010, and 40 percent said they are more optimistic about its potential than they were last year.
The survey’s respondents hold more than $627 billion of real estate globally, including $265 billion in the U.S. The survey was conducted in the fourth quarter of 2010 by James A. Graaskamp Center for Real Estate, Wisconsin School of Business.
Based in Washington, D.C., AFIRE preserves and promotes investment in cross-border real estate. AFIRE has nearly 200 members representing 21 countries.