Recently, two common themes have been making their way into international financial headlines: the worry of a global slowdown and possible recession, and the low domestic interest rates in the United States. As global market volatility continues to grow, foreign investors are searching for alternative asset classes in a "flight to safety" effort, particularly in the United States real estate market. The major key investors, listed below, are focusing their real estate investments in three primary real estate areas: commercial, retail, and residential.

Foreign investors include many different entities, including private firms, state-owned firms (such as insurance companies, sovereign wealth funds, and state pension funds), and wealthy individual investors. While some of the investments are leveraged, the degree of leverage is relatively low at around 40 percent. Interestingly, most investments are cash investments, as foreign investors seem to want to diversify their currency as the dollar strengthens. While cash investments may not generate the same high returns as borrowing using interest rates, cash may buffer the exchange rate risk when investing internationally.

 

Click on the buttons below to read about major foreign investors and their investment decisions.