Known as a top tourist destination because of its warm climate, sandy beaches, historic sites and enchanting cities, Spain is a nation of nearly 47.5 million people. Beyond tourism, Spain’s top industries include auto manufacturing, agribusiness and energy.

During the year ending in second-quarter 2023, Spanish investors proved to be quite interested in U.S. commercial real estate. During this period, some of Spain’s top companies acquired 17 U.S. properties totaling more than $2.2 billion, according to MSCI Real Assets. This amount alone is impressive enough. But the shocker is that the figure is 5,000% more than what Spanish investors spent from mid-2021 through mid-2022.

The increased activity vaulted Spain to fourth place on MSCI’s ranking of the top 25 sources of capital into U.S. commercial real estate. Spain trailed only Japan, Singapore and Canada on this list. Spain’s ascent has been meteoric as it ranked No. 7 in calendar year 2022 and No. 25 in 2021.

One of the main reasons for this considerable growth in activity was the real estate expansion of Pontegadea, a multinational investment company owned by Spanish billionaire Amancio Ortega. He made his fortune by founding the fashion retailer Inditex, the largest fast-fashion group in the world and the owner of the multinational clothing chain Zara.

Pontegadea, which is developing a large real estate portfolio, has been spending hundreds of millions of dollars to acquire a variety of U.S. properties. These range from Amazon-leased office space in Seattle to warehouse and distribution centers in California, Florida and Pennsylvania.

According to MSCI, Pontegadea acquired 12 industrial properties and one apartment complex in 2023. The main seller of the industrial assets was Blackstone, one of the largest landlords in the U.S. Pontegadea appeared to be capitalizing on Blackstone’s need for cash amid the commercial real estate downturn. Blackstone was known to be selling parts of its portfolio, including casino assets and various industrial properties that were performing well.

In 2022, Pontegadea acquired five logistics centers located in Tennessee, South Carolina, Virginia, Pennsylvania and Texas. The largest single U.S. deal by Pontegadea in 2023, according to MSCI, was the August acquisition of a 45-story apartment complex in Chicago for $231.5 million.

Pontegadea isn’t the only Spanish company that has recently expanded its real estate empire. The Mallorca-based travel conglomerate RIU Hotels & Resorts acquired a six-story office building in Manhattan for $173 million. The October 2023 purchase was an intriguing move for RIU, which owns 96 hotels in 20 countries. The building was slated to be demolished to make way for a hotel tower, but the previous owner was unable to secure permits from the city. It will now be up to RIU to convince officials to back a new plan.

Only time will tell if Spain’s major investors continue to find U.S. apartment complexes, offices and industrial space enticing. But it seems like a safe bet that the wave of acquisitions by Spanish investors has yet to end. ●

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Per MSCI data, this dollar amount ranked No. 8 among foreign sources of capital into U.S. commercial real estate during that time period. Bahrain finished just behind nearby United Arab Emirates, another moneyed Middle Eastern powerhouse. It’s familiar territory for Bahrain: During the 2022 calendar year, the little island country in the Persian Gulf was 10th among overseas sources of funding. In 2021, it was fifth.

It’s worth noting that in dollar terms, Bahrain’s deal volume plummeted 67% from midyear 2022 to midyear 2023. That’s a significant amount, to be sure, but not out of the ordinary given the state of commercial real estate investments, cross-border or otherwise, over the past year. Of the nine other countries among the top 10 foreign funding sources in that time frame, six posted annualized declines, and five of these pullbacks topped 30%.

Possibly more prescient than the large dip by Bahraini investors as a whole is the activity of the nation’s most prominent stateside real estate investment entity — the aptly named Investcorp, a global funds manager for institutional and private clients with offices worldwide. Among foreign buyers of U.S. commercial properties, InvestCorp snapped up 14 stateside properties and posted the eighth-largest dollar volume for the year ending in Q2 2023, MSCI reported.

The firm has remained proactive since then, announcing a $216 million purchase of an industrial portfolio this past September. The acquisition, peppered across five markets (including Atlanta, Boston and San Antonio), spanned some 1.6 million square feet across 31 infill warehouses with a collective occupancy rate of 94%.

The move pushed Investcorp’s industrial holdings within the U.S. to about 42 million square feet across more than 600 buildings with an aggregate value of $4.8 billion. “Industrial assets have enjoyed consistent performance throughout the recent market volatility as a result of strong fundamentals that are driving outsized demand and considerable rent growth when compared to other asset classes,” said Herb Myers, the company’s co-head of North American real estate, after the September acquisition.

That’s a ringing vote of confidence in U.S. industrial real estate resilience from Bahrain’s most active overseas investment company. Coupled with the strong record for Bahraini investors in recent years, it seems safe to expect another relatively robust year in 2024 from the Middle East’s little investment engine that could. ●

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Reuters reported that construction starts for residential and commercial properties in Germany during the first half of 2023 plummeted by 47% compared to the previous two-year average. The nation’s largest real estate investor, Vonovia, lost $2.2 billion in second-quarter 2023. And German commercial real estate transaction volume in H1 2023 finished at one-third the level of its five-year average, Bloomberg reported.

All of this goes to show that German investors are being quite cautious these days about where they place their money. A normally reliable source of capital into U.S. commercial real estate, Germany recently posted one of the largest pullbacks in a global investment market that’s full of them.

Germany was the No. 3 source of foreign capital into U.S. commercial properties in 2021 and No. 5 in 2022, according to MSCI Real Assets. For the year ending in Q2 2023, however, it dropped to No. 9. During these 12 months, German investors purchased only 14 assets on U.S. soil and their aggregate volume of $696 million was down 91% year over year.

Still, there have been a handful of noteworthy acquisitions by German investors of late. The largest of these was announced in October 2022 when Frankfurt-based Union Investment and a Seattle-based partner bought an office complex in Sunnyvale, California, for $222 million. The property features a new four-story office building that boasts LinkedIn as its main tenant.

Class A multifamily properties remain highly prized targets for overseas investors, and the BVT Group (headquartered in Munich and Atlanta) got its hands on a sprawling apartment community that’s being built in Charleston, South Carolina. The project, which is expected to be finished in the latter half of 2024, will include 336 luxury units. The deal was valued at $96.4 million, MSCI reported. BVT’s U.S. division now owns 30 multifamily assets totaling 9,200 units.

German investors closed three other deals valued at $75 million or more during the year ending this past June, MSCI reported. Hamburg-based ParkProperty Capital shelled out $91 million in July 2022 to acquire a posh multifamily community in Atlanta. The property is within walking distance of many high-paying jobs at Piedmont Hospital.

In January 2023, Munich RE (a multinational insurance group) bought a similarly pedestrian-friendly mixed-use building in downtown Durham, North Carolina. The property is a repurposed tobacco factory and warehouse that now includes 247 apartments and 20,000 square feet of retail space. The price tag was $89 million, according to MSCI. And Munich RE teamed with CBRE Investment Management this past May to nab another Class A multifamily property in Dallas for $77 million.

Although German players have stayed on the sidelines of late, it’s a reasonable bet that they’ll return to action once market conditions improve. Notably, Commerz Real (the real estate wing of Commerzbank AG, Germany’s third-largest bank) recently opened offices in New York City and Washington, D.C. The company has had an on-and-off relationship in the U.S. dating back two decades, and according to one of its fund managers, it has an expressed interest in America’s gateway cities. ●

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The lower level of activity was a dramatic change from 2021 when South Korea accounted for $5.83 billion in U.S. direct acquisition volume. The recent pullback resulted in South Korea plunging on the list of the top countries for capital into the U.S., from No. 3 in 2021 to No. 11 as of midyear 2023, according to MSCI.

In recent times, South Korean corporate investors have been more interested in selling than buying. According to MSCI data, the automaker Hyundai Motor Group ranked No. 20 on the list of top cross-border buyers but was credited with purchasing only a single property during the year ending in June 2023. In the same time frame, Korea Investment Holdings ranked No. 11 among the top sellers after jettisoning seven assets totaling about $1 billion in value.

These numbers, however, are only a small part of the story of South Korea’s recent activity in America. Some of the East Asian economic powerhouse’s largest corporations have committed to making major investments in the U.S. industrial sector now and into the future. That includes a strong focus on electric vehicle (EV) batteries and other cutting-edge technology.

The largest deal announced of late is SK Group’s plan to invest $22 billion in American manufacturing facilities in the coming years. One of South Korea’s largest conglomerates, SK Group has diversified operations across the U.S. that produce everything from pharmaceuticals to EV batteries. It currently employs more than 6,000 people in America with plans to grow its headcount to 20,000 people by the end of 2025.

This year, SK Group subsidiary SK Signet opened a new EV charging plant in Plano, Texas. The facility will have the capacity to produce more than 10,000 ultra-fast chargers each year. A separate SK Group subsidiary is teaming with Hyundai to build an EV battery cell plant in Bartow County, Georgia. This will be SK Group’s third EV battery-making facility in Georgia. Yet another SK Group subsidiary has made agreements with Avis Budget Group to install EV charging stations at the George Bush Intercontinental Airport in Houston. SK Inc. and SK Energy have expanded their presence in North Carolina, adding a second office in the Charlotte area along with a new research and development facility in Raleigh.

Hyundai announced in May 2022 that it would invest $5 billion in the U.S. by 2025 to develop mobility solutions such as artificial intelligence, autonomous driving and robotics. In December 2020, Hyundai made a deal with Japanese investment giant Softbank for an 80% stake in robot maker Boston Dynamics, which is best known for Spot, a robotic dog that can walk on its four legs.

Not to be left out of the EV movement, Samsung announced a $3 billion joint venture with General Motors this past April to develop an EV battery plant in the U.S. The location hasn’t been decided yet, but the plant is expected to open in 2026. Last year, LG Energy Solution, another South Korean industrial power, announced a joint venture with General Motors known as Ultium Cells. The companies are building EV battery plants in Michigan, Ohio and Tennessee. The U.S. Department of Energy provided a $2.5 billion loan to fund the project, which is expected to create 5,100 long-term jobs. ●

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Whether the destination is a tourist’s dream, a metropolitan area on the rise or a country experiencing major growth, commercial mortgage brokers need to know that leveraging the assistance of a private lender can give motivated clients an edge in affluent markets around the globe. In fact, it’s precisely the in-demand nature of these markets that makes private lending an excellent option for investors, rather than a backup option if a traditional lender falls through.

“For even the wealthiest borrowers, using one’s own money to fund a real estate purchase is risky. They would rather invest their money in other ways.”

Direct private lenders bring three distinct advantages to the table in competitive, wealthy real estate markets. These include speed to closing, flexible deal terms and fewer regulatory controls. Opportunities in affluent real estate markets can move fast. This is influenced by the popularity of the market (i.e., the sheer number of investors who want to plant their flag) and the scarcity of property in some smaller locations.

When there’s a long list of interested buyers putting together offers, becoming one of the first who can get to the table and close the deal is of utmost importance. Although traditional lenders may have few qualms about approving a loan for property in a popular, high-end locale, they still need months to work through their own red tape. Private lenders, however, can meet this need for speed with the resources and skill set to close in as little as a few days.

Private partners

Even in hot real estate markets, traditional lenders may only be willing to fund a certain deal type. These deals need to meet the bank’s strict internal criteria for use, inspections and other quotas.

Such internal criteria may often rule out opportunities to acquire properties such as raw land — real estate that’s extremely valuable within the context of an affluent market but will not pass muster with a traditional lender that has a blanket policy against land loans. This is especially true in international markets, where traditional lenders will rarely work with borrowers on any type of property, let alone raw land.

Private lenders, on the other hand, have flexibility built into their business models. They can take a step back and examine the merits of a deal in a way that traditional lenders may not be able to. Private lenders will take into account the quality and affluence of the market when evaluating a potential opportunity. Plus, they don’t have arbitrary, internal policy-driven limits that may fund a loan for one borrower and not for another. Simply put, the chances of obtaining the funding needed are higher when partnering with a private lender.

For even the wealthiest borrowers, using one’s own money to fund a real estate purchase is risky. They would rather invest their money in other ways. Instead, they go to private lenders for bridge loans to fund their real estate deals while they pursue other funding sources. Private loans give borrowers confidence that they’re making smart investments with a layer of protection.

On top of that, specialized private lenders are highly experienced in navigating the real estate laws in many foreign countries. Borrowers thus get both financial and regulatory security when they seek funding from these private lenders. This combination, including the faster approval processes when compared to traditional lenders that take months to decide, makes private lenders the go-to sources for investors planning to enter foreign markets.

Caribbean islands

Wealthy foreign real estate markets present a multitude of opportunities for mortgage brokers and their clients. Some of the most breathtaking landscapes — and most coveted real estate — can be found throughout the Caribbean.

Driven by the region’s pristine location and the exclusivity created by its wealthy enclaves, Caribbean countries have vibrant economies that are fueled by the global tourism industry. The islands offer limited inventories of real estate due to their sizes, resulting in premium prices that can reach seven or eight figures for the best locations. This growth isn’t expected to slow down anytime soon either.

One example is the French territory of Saint Barthelemy, better known as St. Barts. Property ownership opportunities are highly sought after on this small island that covers about 10 square miles. The limited space and unique surroundings have fueled the interests of international buyers, driving up the premiums that investors are willing to pay for their own piece of paradise. Villas can cost more than $5 million throughout the island, with the most exclusive beachfront properties easily fetching quadruple the price.

Another popular Caribbean destination is St. Maarten, an independent constituent country with ties to the Netherlands. At just over 13 square miles, St. Maarten presents many of the same opportunities and challenges as St. Barts when it comes to exclusivity and availability. The island continues to attract many of the world’s wealthiest people. This presents an opportunity for both residential and commercial investments. For instance, some Guana Bay villas with ocean views can cost as little as $1 million, whereas luxury cliffside compounds can go for $20 million.

The Cayman Islands, a British overseas territory, boasts one of the highest standards of living in the Caribbean. Developed and raw-land investment opportunities abound in this trio of islands. It’s one of the fastest-moving real estate markets in the Caribbean and a corporate magnet due to its status as a global tax haven. The country levies no income tax, capital gains tax or corporate tax. The largest number of offshore companies in the Caribbean region are registered here.

South America

Investment opportunities in several South American countries also continue to attract attention. These include Brazil, where high-end properties in major cities such as Sao Paulo and Rio de Janeiro are multiplying fast, with a particular interest in luxury apartments in both cities.

For instance, the luxury and ultra-luxury apartment sectors in Sao Paulo expanded quickly in the first nine months of 2021, with sales more than doubling compared to the same period in 2020. In Rio de Janeiro, the luxury home market has grown by 200% in the past five years. Combined with a relatively competitive market and an appetite for new construction, these growing cities are attracting investors from around the world.

Although Peru isn’t the wealthiest country in South America, its real estate market has been on the rise. In 2021, new home sales in the Peruvian capital of Lima were up 44% year over year. With a population of 11 million, Lima is among the largest cities in the Americas, and the demand for residential and commercial real estate continues to grow as a result. The nation has a growing population and a housing deficit that can benefit from foreign investment. Peruvian legislation has allowed for infusions of foreign capital to help fuel growth.

Northern neighbor

While Canada might not be the first country that comes to mind when thinking of real estate investment hot spots, our neighbors to the north have proven to be a popular location for cross-border buying sprees. The country’s high standards of living, economic diversity and stable political climate have attracted new residents and flourishing business opportunities.

Cities such as Toronto and Vancouver continue to grow, creating opportunities for investors to build new housing and commercial properties. Sales of all types of housing in Vancouver — a hotbed for tourism, the entertainment industry and the technology industry — rose by 23% year over year in August 2023.

Rents for a one-bedroom apartment in Toronto, the wealthiest city in Canada as measured by the number of high net worth individuals, have grown by 40% in recent years. Additionally, Canada does not have residency or citizenship requirements to own property, making it easy for U.S. investors to access the market.

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Affluent markets around the world offer opportunities for commercial mortgage brokers to help clients expand their business operations. Private capital can serve as a game-changing entry point into these exclusive investment arenas. In a competitive land and property market, the flexibility and speed that a private lender brings to the table can make all the difference between getting the deal done and missing the boat. ●

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A lack of awareness about financing options for foreign national buyers with little or no U.S. credit history might explain why these newcomers wait two to three years to establish credit before buying a house, and why nonresident buyers often make all-cash purchases. Recently, there has been growth in creative mortgage programs for foreign nationals who lack credit in the U.S., including recent immigrants with visas as well as nonresidents.

“Recently, there has been growth in creative mortgage programs for foreign nationals who lack credit in the U.S.”

Certainly, mortgage originators will face some challenges working with foreign nationals, such as language barriers, limited credit histories and currency exchange rates. But these obstacles can be mitigated by working with a lender that’s accustomed to these borrowers and has programs designed specifically for them. With the COVID-19 pandemic worries waning and international travel returning to pre-pandemic norms, now is the perfect time to start working with more foreign national buyers.

Sizable market

The National Association of Realtors (NAR) recently released a report that details the number of transactions by international clients who purchased U.S. residential property during the 12-month period ending in March 2023. Foreign nationals spent $53.3 billion on residential real estate during the year. This figure accounted for 2.3% of the $2.3 trillion in U.S. existing home sales.

The number of purchases by foreign nationals totaled 84,600, which is the lowest level since NAR began tracking these purchases in 2009. Still, these buyers purchased 1.8% of the 4.73 million existing home sales that occurred during the year. The following represents the countries with the most foreign buyers and their total dollar volume of sales activity:

• China: 13% of foreign buyers, $13.6 billion
• Mexico: 11% of foreign buyers, $4.2 billion
• Canada: 10% of foreign buyers, $6.6 billion
• India: 7% of foreign buyers, $3.4 billion
• Colombia: 3% of foreign buyers, $0.9 billion

These foreign buyers most frequently purchase properties in Florida, California, Texas, North Carolina and Arizona. Buyers from some countries tend to purchase in specific states. For example, those from China prefer properties in California.

Clearly, there is a sizable pool of foreign national buyers who are in the market to purchase U.S. residential properties. For the originators who seek to serve them, there are abundant growth opportunities.

Enviable opportunities

America is often the envy of the world for many reasons, but its economic stability and diversity of cultures and nationalities are notably auspicious. The U.S. is truly the world’s top melting pot and many people from around the world wish to purchase homes in this country.

Additionally, many foreign national clients are high net worth individuals who are looking to invest in U.S. real estate as a means to diversify their portfolios. By purposely catering to foreign nationals, mortgage originators can increase their share of clients and expand their business beyond their local market. By tapping into the foreign national market, originators can boost their revenues substantially.

Originators may also have the opportunity to expand their business into related markets. For example, an originator who has established a strong reputation for serving Chinese clients may be able to expand their business into other Asian markets such as Japan, South Korea or Vietnam.

Like all markets, U.S. real estate is cyclical, fluctuating between periodic peaks and valleys. By working with foreign national clients, originators can diversify their base and reduce the risk of relying too heavily on one group of clients. A more diverse client base will also help originators to better withstand market pressures and downturns while reducing their dependence on the performance of the U.S. market.

Consistent referrals

When foreign national clients are satisfied with the services of a mortgage originator, they are more likely to refer their friends and family to him or her. This can result in a steady stream of referrals that can burnish their reputation and expand their business.

To effectively serve foreign national clients, originators must be willing to invest in their own professional development. This may include developing language skills, taking courses, or attending conferences that focus on cross-cultural communication, international business practices or specialized investment strategies. In this way, mortgage originators can establish themselves as reliable and trusted advisers.

The willingness to invest in one’s professional development also pays dividends in other significant ways. There is a need for originators to become sensitive to cultural differences and to understand how business is conducted in different parts of the world. To foster this awareness, originators generally become more flexible and adaptable — attributes that will serve them well with all clients.

Originators may also need to augment their skill set to effectively serve their clients. For example, a foreign national client may require additional assistance with visa and immigration issues, or they might require specialized tax planning strategies.

Originators who can deliver these kinds of expert professional services often enjoy an enhanced reputation. And this can help them attract new clients, secure more business and gain a competitive advantage over those who do not have experience serving the foreign national market.

Expanded access

One of the primary benefits of working with foreign national clients is the ability to access global markets. Foreign nationals often have investments in their home countries and other emerging markets that are not readily available in the U.S.

Originators who work with them can gain access to these markets as well. This can be a significant advantage for originators, allowing them to diversify their clients’ portfolios and take advantage of investment opportunities that can be offered to other clients as well.

Working with foreign national clients helps originators to stay current on international business trends. Many foreign national clients are successful businesspeople who are well versed in worldwide economic affairs. Originators can gain valuable insights into global business activities from them and stay up to date on economic trends that may also impact the U.S. real estate market.

In addition to the U.S. residential real estate market, foreign national clients are often interested in acquiring commercial investment properties. They are generally inclined to make long-term investments, leading to further profitable opportunities for originators.

Originators who work with foreign national clients may also benefit from higher commissions. These clients often have larger investment portfolios and may be willing to pay higher fees for specialized investment advice and management.

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There are many benefits available to originators who work with foreign national clients. From access to global markets and greater investment opportunities to a steady stream of business and potentially higher commissions, originators can enjoy a wide range of advantages.

Additionally, working with foreign national clients can help originators diversify their client base, gain exposure to different investment strategies and enhance their cultural understanding. Ultimately, the mortgage professionals who work with foreign national clients are better positioned to compete in the global market and provide quality service to their clients. ●

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This close relationship holds true within cross-border real estate investments, just as it does nearly everywhere else. Investors from the U.K. are an active group when it comes to outbound activity, directly purchasing some $13 billion in real estate outside British borders in 2022, according to CBRE. The vast majority (83%) of this capital was deployed in other parts of Europe, but American assets gathered their fair share of British attention as well.

During the year ending in second-quarter 2023, investors with ties to the U.K. poured roughly $1.3 billion into 22 U.S. commercial properties, per MSCI Real Assets. That dollar amount was good for No. 6 among the top countries for acquisition volumes into the U.S. during this period, up three spots compared to their ranking for the 2022 calendar year.

According to MSCI data, the country’s most active U.S. buyer in 2022 was London-based GSA International Ltd., a major worldwide name in student housing. GSA accounted for six of the 25 stateside acquisitions by U.K. investors last year, and it has been assertive in the flourishing U.S. student housing space since its entry into the market in late 2020. The latter half of 2022 continued this pattern, highlighted by the August procurement of the 796-bed Waterloo Tower in Austin and the October purchase of five other premium assets comprising 1,600 beds in Austin; Flagstaff, Arizona; and Charleston, South Carolina.

GSA carried this momentum into 2023, with the company announcing this past January that it had closed more than $550 million in financing facilities across the U.S. through a joint-venture partnership with Morgan Stanley Real Estate Investing. GSA officials touted their ability to secure new lending partners in the current economic climate as a testament to the quality of the company’s track record, the quality of its target assets and the stability of the student housing space. Indeed, having expanded its footprint to more than 18,000 beds across 32 cities in 23 states, GSA seems poised for further growth in a burgeoning sector and appears to be a British-based player to watch.

It’s worth noting that U.K. involvement in U.S. commercial assets has slowed of late. During the four quarters ending this past June, investments from U.K.-based funding sources fell by 39%, MSCI reported. That’s a sizable decrease at face value, but it’s not as brow-raising as one might think.

For one thing, the slowing commercial real estate climate has pushed most cross-border investment into the red across the board. Only three of the top 25 foreign sources of capital grew their U.S. outlays during these four quarters, and the U.K.’s year-over-year decrease in this time frame pales in comparison to that of fellow heavy hitters Germany (-91%) and South Korea (-92%).

Furthermore, British real estate investors appear to be just as motivated as they have been in recent years. According to CBRE’s Investor Intentions Survey released this past March, investors from the U.K. expected to maintain comparable levels of activity this year as in 2022, offering optimism as further data for this year’s transactions becomes available. ●

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Singaporean investors are important players in the global economy. With a total outlay of more than $1.75 trillion, the nation has the world’s sixth-largest state-owned investment system (which includes central banks, sovereign wealth funds and public pension funds).

Worries about a global recession, however, appear to be prompting a recent pullback in certain sectors. For instance, among the top 25 countries for capital placed into U.S. commercial real estate, Singapore had the largest drop-off in dollar volume from 2021 to 2022. Singaporean investors purchased 80 properties last year for a total volume of nearly $1.8 billion, but that was 89% below the level they posted a year earlier, according to MSCI Real Assets.

The attrition can be tied in large part to the disappearance of Mapletree Investments, which holds some $77 billion in global real estate assets. Mapletree and one of its subsidiaries placed more than $5 billion into U.S. properties in 2021, but neither entity was listed on MSCI’s 2022 ranking of the top cross-border buyers.

The bulk of recent business from Singapore to America has been done by GIC, a global investor with diversified stakes in bonds, equities and real estate. GIC was the fourth-largest cross-border buyer of U.S. properties last year, MSCI reported.

In August 2022, GIC partnered with Florida-based Workspace Property Trust to acquire a majority stake in 53 suburban office buildings — many of them in the Atlanta, Dallas and San Francisco metro areas. The deal was valued at $1.1 billion. The Wall Street Journal reported that “Workforce and GIC are betting that demand will rise for higher-end, modern suburban offices in good locations as more companies seek out areas closer to where their employees live.”

GIC made headlines again in February 2023 when it joined with Oak Street in a $15 billion purchase of STORE Capital Corp., an Arizona-based real estate investment trust that specializes in single-tenant net-lease properties. The REIT reportedly owns about 3,000 assets across the U.S. and might be best known for its relationship with Warren Buffett, who purchased 10% of its stock in 2017. This past June, GIC continued its spree in the REIT space with an $868 million joint-venture acquisition of Indus Realty Trust. GIC and Centerbridge Partners took control of 44 industrial buildings in East Coast states.

A newly emerging participant from Singapore is GLP Capital Partners, which has some $125 billion in global assets under management. Earlier this year, it announced two separate acquisitions of Class A industrial properties in California’s Inland Empire. Late last year, GLP also finalized a $1.5 billion value-add opportunity fund for self-storage facilities. The fund’s largest transaction to date occurred in August 2022 when it nabbed 11 properties in California, Oregon and Texas.

Another Singaporean funding source, CapitaLand, owns 79 U.S. properties in markets such as Chicago, Kansas City and Raleigh. Its industrial REIT affiliate announced a $40 million deal last year to convert a San Diego office property into life-sciences space for Crinetics Pharmaceuticals. ●

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Israeli investment companies were involved in the acquisition of 89 U.S. properties in 2022 with a total value of nearly $1.5 billion. The volume spent by Israeli firms was down 5% from 2021 but still accounted for 4.2% of all cross-border investments into the U.S., according to MSCI Real Assets. And this level of activity moved Israel up to the No. 8 position among foreign investment sources into the states. The Middle East nation and longtime U.S. ally ranked 10th in 2021.

The most active Israeli commercial real estate company was Faropoint Investments, which acquired 51 U.S. properties last year, the highest number among all foreign buyers, MSCI reported. The dollar volume for these deals, however, was only good enough for 16th place on MSCI’s ranking. The Tel Aviv-based company, which has its North American headquarters in Hoboken, New Jersey (as well as other offices around the U.S.), specializes in Class B last-mile industrial properties. In 2021, Faropoint went on a major shopping spree, spending more than $700 million to acquire 148 buildings totaling nearly 9 million square feet. Most of these assets were categorized as Class B industrial.

The dealmaking continued in 2022, with Faropoint spending $59 million to acquire six warehouses in the Dallas-Fort Worth metroplex. The company also announced plans to invest $200 million in Florida during the year, including the $33 million purchase of 350,000 square feet of industrial space in Tampa and Jacksonville. Other areas of expansion for Faropoint include Chicago, Oakland, Washington, D.C., Baltimore and northern New Jersey.

Faropoint also was one of the most prolific sellers of U.S. properties last year, MSCI reported. The firm disposed of 85 properties, the second most among foreign companies. The value of these assets placed Faropoint at No. 17 on MSCI’s list of the top 20 cross-border sellers. One of Faropoint’s largest sales included a portfolio of 109 last-mile logistics facilities, which went to a private investor for $481 million. The buildings total about 6.8 million square feet and are concentrated in Atlanta, Houston, Memphis and Philadelphia.

Another major Israeli cross-border player is Migdal Insurance Co. Ltd. Israel’s largest insurance firm has been involved in various real estate sectors, including renewable power production. In February 2022, Migdal announced an expansion of its strategic partnership with Doral Renewables LLC by committing to invest an additional $75 million in the second phase of the Mammoth Solar project in northwest Indiana. Later in the year, Migdal was part of a separate agreement with Doral and Apollo Global Management to sell up to $500 million in convertible notes that will help to fund more renewable energy and storage projects.

Last year, Migdal also joined a strategic venture with White Oak Partners and BentallGreenOak to acquire high-quality, contemporary multifamily communities in suburban areas of large secondary U.S. cities. With these and other continued commitments to the U.S. commercial property market, it appears that major Israeli real estate and financial firms have not let differences between Washington, D.C., and Jerusalem impact where they buy property. ●

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Much of this direct investment goes into commercial real estate, especially in the U.S. Per figures from MSCI Real Assets, companies with Swiss connections invested $1.84 billion into American commercial properties last year. While that was down 13% compared to 2021, it was still good for fifth place among all countries for cross-border investments into the U.S. That’s familiar territory for the Swiss, who were No. 6 in 2020 and No. 7 in 2021 on MSCI’s rankings.

Two Swiss companies were among the top 20 cross-border buyers of U.S. commercial assets in 2022, according to MSCI. Stoneweg SA ranked No. 12, while UBS, which has real estate investment operations but is more prominently known as the largest private bank in the world, was 13th.

Stoneweg, in particular, has been active in the U.S. apartment sector and has its stateside multifamily operations headquartered in St. Petersburg, Florida. Its current portfolio includes more than 40 properties, many of them in large U.S. cities and their suburbs. Stoneweg’s acquisitions since October 2022 alone include 161 units in Dallas, 178 units in Cincinnati, and 348 units in Kansas City, Missouri. Prior to that, the company also deployed funds last year to secure multifamily assets in cities such as Houston, Jacksonville and Charlotte.

With commercial real estate trending downward as the calendar turned to 2023, Stoneweg has been relatively quiet so far this year. Rafael Cerezo, the company’s chief investment officer, acknowledged this past March that the environment is “very much wait and see” while adding that the market is due for a repricing. When that happens, the company will be ready, he said.

“We look to invest or anticipate market trends to offer our investors compelling returns at a period of time in products that are likely to become of significant interest to institutional buyers over the course of the next three, four, five years,” Cerezo said. “That means that we need to be at the forefront, really, of investing in new typology of assets, or assets that are going to come on trend. In the U.S., that for us means primarily focusing on the multifamily industry.”

UBS, meanwhile, recently made headlines for entirely different reasons. In March 2023, the company stepped in to buy fellow Swiss banking giant Credit Suisse, preventing its collapse after a long downward spiral. The transaction is gigantic in terms of its international finance impact, but it also has huge implications for commercial real estate as well. The new company will have more than $100 billion in combined real estate assets under management, as well as a commercial property loan portfolio of $80 billion.

Take it all together and you’ve got a major overseas player in U.S. property investment finding itself in interesting waters of late. Clearly, there remains plenty of money to be deployed via Swiss investors, who have traditionally been a shrewd and active bunch. How Switzerland’s biggest investment companies handle the navigation of these aforementioned waters will go a long way toward deciding Switzerland’s outlay into U.S. assets in 2023 and beyond. ●

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