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News release

The United States Proves “Land of Opportunity” for Foreign Investors from Sea to Shining Sea

Global capital makes its way to industrial-driven secondary markets


​NEW YORK, April 2, 2013 - Nearly $27 billion of global capital poured into the United States in 2012, with two-thirds of investments concentrated in nine major markets, cites Jones Lang LaSalle’s Capital Markets experts in their recent International Capital Sources – U.S. Inflows report. The top ranked cities remain Manhattan, San Francisco and Los Angeles, with Chicago closely following. Select secondary markets, including Houston, Seattle, Phoenix, Hawaii and the Inland Empire drew international interest for their long-term investment opportunities in the industrial sector.

“Global investors continued hedging their bets in real estate, due to its role as an income-producing hard asset in an inflationary environment. The U.S. ranked as the world's most transparent real estate market in 2012, with the healthiest growth prospects, and historically low interest rates and government yields, making it the apple of investors’ eyes compared to other developed nations,” said Steve Collins, International Director of Jones Lang LaSalle’s International Capital Group.

Consistent with Jones Lang LaSalle’s findings, Urban Land Institute’s Emerging Trends in Real Estate 2013 report identified the “less-expected” industrial-strong secondary markets as those drawing the interest of growth-seeking foreign investors in 2012 and into 2013. The “data shows that non-major markets – the field – may not be a ‘bad play’ moving forward. A comparison between the big six and the field in terms of macroeconomic elements reveals some strong areas for these markets.” Jones Lang LaSalle found the following secondary markets to be the top-ranked recipients of global capital in 2012:

  • HOUSTON: The energy sector has propelled this market into an investment hotbed. In 2012, a total of 31 properties were acquired by international capital for $1.38 billion. In the year ahead, industrial, multifamily and office will reign supreme as top asset classes despite high cap rates. 
  • INLAND EMPIRE: The industrial sector propelled the Inland Empire as a target market for foreign investment in 2012, with $67 million accounting for 23 transactions. In 2013, we expect to see more development and demand from e-commerce, as well as organic growth from companies in the region.
  • SEATTLE: Seattle’s multifamily sector continues to boom as millenials and baby boomers return to the urban core in a journey to embody the “work, live, play” lifestyle. In 2012, 28 properties traded hands to global owners for $91 million. In the next year, Seattle will see construction reemerge as demand for office and apartment space continues full steam ahead.
  • PHOENIX: The Phoenix employment sector is heating up, and in turn the real estate market is moving toward normalcy. In 2012, a whopping 53 properties traded for a total of $89 million. In the year ahead, the industrial sector is expected to witness occupancy gains and single digit overall vacancy rate, while the office sector is expecting to see positive absorption in the year ahead.
  • HAWAII: With a single $76 million transaction in 2012, Hawaii joined the list as a top market for foreign investment. The Hawaii hotel market continues to rebound with astounding revenue per available room (RevPAR) growth. The year ahead is likely to witness further investment as the market gains traction bolstered by strong job growth.

“We can expect an increase in direct U.S. real estate investment activity this year spurred by new pension funds and sovereign wealth participants joining the investment community. Given the limited supply, and preferred choice of trophy assets, it’s probable we will see faster and greater moves into secondary markets that are charged with growth in the technology and energy sectors,” added Collins.

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Jones Lang LaSalle Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether a sale, financing, repositioning, advisory or recapitalization execution. In 2010 alone, Jones Lang LaSalle Capital Markets completed $43 billion in investment sale and debt and equity transactions globally. The firm’s dealmakers completed $33 billion in global investment sales and buy-side transactions, equating to nearly $140 million of investment trades completed every working day around the globe. In the United States, Jones Lang LaSalle grew its office broker volumes by 257 percent in 2010 and is quickly gaining market share across all property types. The firm’s Capital Markets team comprises approximately 800 specialists, operating in 185 major markets worldwide.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet. Its investment management business, LaSalle Investment Management, has $47.0 billion of real estate assets under management. For further information, visit www.jll.com.