America for Sale: Foreigners Flock to U.S.
Overseas investors are drawn to real estate here because of the cheap dollar.
Oct. 11, 2007— -- Does your new next-door neighbor have an Irish accent? Maybe an Italian one? Or how about Canadian?
Don't be so surprised.
As the value of the dollar plummets, American real estate looks more and more attractive to overseas investors.
Foreigners buying property -- both residential and commercial -- in the United States is nothing new. But in recent months, as the exchange rate has swung further in their favor, Irish, British, Italian and even Canadian investors have started to gobble up more land here.
"This has been a record year for acquisitions by offshore investors," said Dan Fasulo, managing director of Real Capital Analytics, which tracks such transactions.
Through the first three-fourths of the year, there has been $31 billion in commercial real estate purchases by foreigners here, according to Fasulo. Compare that to $23 billion in all of 2006. And Fasulo added: the fourth quarter is usually the most active.
Americans have seen foreigners snag key properties in the past.
Probably the best example of this came in 1989 when 80 percent of the Rockefeller Center, one of New York's top landmarks, was sold by the Rockefeller family to Japan's Mitsubishi Estate Company.
But it wasn't just landmarks being bought by Japanese investors. Thanks to a strong yen many Japanese bought up residential real estate developments in places like California.
Today the money is coming mostly from Europe and probably not the countries you would expect.
Fasulo said that in the past, we have seen investment from Germany, Australia, Japan and the United Kingdom. But lately investors from other countries have joined them, including Ireland, Spain, Italy, Hong Kong and very recently Canada.
There are also plenty of buyers from the Middle East -- think Dubai -- but that buying spree is driven not so much by a decline in the dollar but by rising oil prices.
"Investors all over the world are just flush with cash that needs to be placed somewhere," Fasulo said. "U.S. real estate, to offshore investors, is considered a very safe and attractive investment."
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