[Image by Neil Kremer via flickr]
Foreign Real Estate Investment in Los Angeles : What You Need to Know Right Now
Japanese development company Mitsui Fudosan Co. recently closed a deal to fund a $1.4 billion office tower on Manhattan’s far West Side. This highlights a clear shift in real estate investment in major U.S. cities, including Los Angeles. Foreign real estate investors are trying to get in on the ground floor of development projects previously dominated by American property tycoons and private equity funds.
Right now, the development of many prominent projects are being undertaken by foreign developers, such as Asian investors and Middle Eastern sovereign wealth funds. In their search for expansion and high return investments, foreign players are outbidding U.S. companies.
These foreign investors usually buy well-established properties where they know that rental income is reliable and occupancy is high.
“We’ve seen more new names, new faces, new investors with large capacity in the last two years than we’ve seen at any other time, said Related, one of America’s largest development companies, CEO Jeff Blau.
In 2014, foreign investors bought $45 billion of commercial real estate in the U.S., second only to $47 billion in 2007.
In downtown Los Angeles, a hotel and an office complex are being built by the family that controls Korean Air. These buildings are going to be the tallest west of the Mississippi.
According to real estate investment executives, foreign pension funds and sovereign wealth funds are boosting real estate holdings due to the low-interest rates that are capping the yields on bonds.
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Read More on Foreign Real Estate Investment in Los Angeles at the Wall Street Journal here