ULI New York Blog

Wrap-Up: The Global Capital Stream: Will Foreign Direct Investment Continue to Fuel NY Real Estate?

FDI Panel

Photo: Andy Feinberg

BY KATIE TANG

ULI New York’s Real Estate Outlook 2016 conference held Wednesday, January 27 honored the release of the industry anticipated annual Emerging Trends in Real Estate ® report, and featured several impressive panels made up of New York’s leading real estate practitioners.

The second panel of the conference was titled The Global Capital Stream: Will Foreign Direct Investment Continue to Fuel NY Real Estate?  The panel was led by moderator Brian Ward, Chief Executive Officer at Trimont Real Estate Advisors, and made up of a diverse mix of panelists, including Tom Arnold, Head of Americas Real Estate at Abu Dhabi Investment Authority (“ADIA”), Erik Horvat, Managing Director at Fosun Property Holdings, and Dean Shapiro, Senior Vice-President of U.S. Investments, Oxford Properties Group.

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With a diverse investment background and from office locations all over the globe, all panelists seemed to share similar thoughts and beliefs on the never-waning foreign interest in New York City – “real estate fundamentals are strong and New York City continues to be the preeminent market for foreign investment,” concluded Dean Shapiro.

In 2015, foreign capital invested approximately $91 billion into US real estate. This data certainly reconfirms that the United States remains a favored target for foreign capital. There are a number of factors that fuel this preference, primarily the strength of the US economy, attractive spreads, liquidity and transparency relative to other markets. Over the past year, Canada, Singapore, China, Norway and the UAE continue to be the top foreign investors in real estate. Going into 2016, Brian Ward, CEO at Trimont Real Estate Advisors, cited “84% of international investors will either maintain or increase their real estate allocations.” Surely there will be ebbs and flows, but foreign capital flows are indeed a long term trend.

With recent softening economic factors stemming from news out of China, opinions have diverged on its effects in the New York City real estate market. However, China is certainly not the only player in the New York City market. Tom Arnold from ADIA and Dean Shapiro from Oxford Properties Group both stated they continue to remain bullish on the New York market.

To re-iterate what Tom Arnold said during the panel pertaining to some anxiety about the market in internal company communications over the past week, “don’t panic.” Even during challenging times, there is no other market quite like New York City.

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