A strong recovery in 2021 in the U.S. commercial real estate market attracted foreign investors who purchased an estimated $57.7 billion in U.S. commercial real estate in 2021, up 49% from 2020, according to NAR’s 2022 Commercial Real Estate International Business Trends report.
Florida was the top destination of foreign buyers of U.S. commercial real estate for NAR commercial members, with a 22% share. Texas came in second with a share of 14%, followed by California with a share of 9%. Georgia, New Jersey, and North Carolina each took a 5% share of the market while Arizona accounted for 4%. No respondents reported a foreign buyer buying in New York, even though it accounts for 3% of NAR commercial members’ business. On the other hand, New Jersey attracted foreign buyers, accounting for 5% of foreign buyers when that state only accounted for 1.3% of NAR’s commercial membership.
Positive Outlook in 2022 for Most Property Sectors
With the easing of travel restrictions and increasing rates of vaccination and herd immunity, NAR commercial members expect commercial property acquisitions by foreign buyers to increase for most property types except office and hotel properties. They expect the strongest increase in acquisitions for apartment buildings (+3%) and land (+2%). However, they expect a decrease in their office and hotel business transactions with foreign investors.
NAR commercial members reported that the main attraction of the U.S. commercial market is that it is a safe and stable place to do business. It is experiencing strong demand and growth, and cap rates are better than in other markets. There’s available inventory and opportunity in commercial properties like turning around Class B retail centers.