German institutions are second largest foreign investors in US

Savills states German institutions are the second largest foreign investor group in the US, accounting for over $3.5 billion of transactions over the past 36 months.  This is second to Canada which, in-line with historic market trends, has led non-domestic investment into the US with a 29% market share. Reflecting the increasingly globalized nature of real estate markets, South Korea and China now rank third and fourth in US inward real estate investment, with some of the most active market participants including National Pension Service of Korea, Zhang Xin (SoHo China) and Norges Bank Investment Management amongst others.

Savills says the US office investment market has experienced a 36% year on year increase in office transactions, with pricing in gateway markets such as Manhattan and San Francisco now exceeding peak levels of 2007. Other tier one and tier two markets have also fared well as both domestic and international investors have sought to capitalize on the US recovery. The most active German investors in both acquisitions and dispositions include Jamestown, GLL Real Estate Partners, DEKA and Union investment and notable transactions include GLL and Union both Buying in Austin Texas, as well as DEKA dispositions in Coral Gables (Florida) and San Jose (California).

Robert Stamm, executive managing director of Savills US, says: “Global capital is shifting and the US is seeing a substantial increase in capital flows from foreign investors who are investing through direct and indirect channels. Transaction volumes by foreign investors have increased by approximately 50% over the past twelve months, and whilst many of these investors are focusing primarily on core, stabilized office and retail properties in gateway cities, investors are also considering top-tier secondary markets which have strong fundamentals as these are later in the cycle and offer a better risk/return profile.”