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New York

Give Us Your Tired, Poor, Huddled Masses… and Your Investments?

United States remains top destination for foreign commercial real estate investment, reaching volumes of nearly $40 billion in 2013

New York, March 3, 2014 — Whether it be multifamily properties in secondary markets or trophy assets in gateway cities, the world’s largest and most liquid market remains the number one destination for commercial real estate investment. According to Jones Lang LaSalle’s (JLL) International Capital Sources report, the United States closed more than $38.7 billion in foreign real estate investments during 2013: a 40 percent increase over 2012. Canadian, Chinese and Australian investors led the way for investment into the U.S., and they’re not the only ones.  Fresh new sources of capital are eyeing the U.S. with bigger appetites than ever before.  It seems Lady Liberty is enticing much more than just the huddled masses.

“Every year, we break a new record for foreign investment into U.S. commercial real estate,” said Steve Collins, International Director at JLL.  “International capital is plentiful, placing money into markets across the spectrum including Manhattan, Los Angeles, Chicago and other top-tier cities.  But even select secondary markets such as Dallas, Houston and Seattle are getting in on the game.”

According to JLL’s Global Real Estate Transparency Index, two big factors are driving foreign investment in the most transparent real estate market in the world:  increased allocations to international pension funds in countries such as Australia and Malaysia, and the tremendous rise of Ultra-High-Net-Worth Individuals (UHNWI) in Asia Pacific seeking to preserve their capital sourced from non-traditional investments and secure it with commercial real estate.
Steve Hason, the Association of Foreign Investors in Real Estate’s (AFIRE) newly elected Chairman agrees, “Within the U.S, investors can participate in investments ranging from predictable core investments in gateway markets to potentially higher-yielding investments in secondary markets.”  According to AFIRE’s latest survey, the U.S. provides an advantage for both safety and stability.

Canada Comes on Strong

Representing nearly one-third of all foreign investment activity in the U.S., reaching volumes of nearly $12 billion, Canada continues to prove it has investment-ready capital. These investors are focused on developing partnerships with REITs and capitalizing on multifamily property opportunities, particularly in emerging Sunbelt markets such as Tampa, Raleigh and Phoenix.

China Seeks Trophies

Chinese investors are taking advantage of the opening up of non-domestic real estate investment and fueling the drive to diversify investments by allocating $3 billion to U.S. real estate in 2013, primarily seeking trophy and Class A office assets in top-performing primary markets.

Aussies Are Outperforming

Australian capital, which is expected to become an even bigger player in the U.S. market over the next several years, allocated $2.6 billion to U.S. real estate in 2013 and rounds out the top three foreign investment presence. Australian investors are securing partnerships to directly own assets, especially in the retail sector.

“An improving U.S. economy and strong market fundamentals will facilitate ongoing foreign investment for U.S. real estate assets, and we expect robust transaction volumes in 2014,” said Marisha Clinton, Director of Research at JLL. “New players will emerge and we anticipate a big showing from Asia and in particular, Singapore and South Korea.”

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 2012 alone, Jones Lang LaSalle Capital Markets completed $63 billion in investment sale and debt and equity transactions globally. The firm’s dealmakers completed $60 billion in global investment sales and buy-side transactions, equating to nearly $240 million of investment trades completed every working day around the globe. The firm’s Capital Markets team comprises more than 1,300 specialists, operating all over the globe.

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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 $4.0 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 3.0 billion square feet. Its investment management business, LaSalle Investment Management, has $47.6 billion of real estate assets under management. For further information, visit