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If there’s one thing the pandemic has laid bare, it’s how globally interconnected we are. And while our interconnectedness has been a vulnerability during this health crisis, it’s also been remarkable to see how global business and commerce continue to thrive.
The National Association of REALTORS® has long had a role on the global stage, bringing lessons about the efficient transfer of property and properties rights into countries with developing economies while fostering new opportunities for our members. NAR’s international reach has never been more important.
In March, after a pandemic hiatus, NAR was again able to host the USA Pavilion at MIPIM, the annual international real estate event held in Cannes, France, which brings together developers and capital. Joining NAR in the pavilion were 11 state and local associations, bringing awareness to economic development opportunities and incentives in the United States.
Although we haven’t seen the end of the pandemic, with flights and borders opening and momentum building, foreign investment has grown. NAR research backs that up.
Global investors stepped up their acquisitions in 2021, purchasing $52.9 billion of U.S. commercial real estate between the fourth quarter of 2020 and the third quarter of 2021. That’s a 45% increase compared with the previous four quarters ($36.6 billion). The level of cross-border capital also slightly exceeded the $50.9 billion in foreign investor acquisitions during 2019.
The U.S. economy remains the largest in the world in terms of gross domestic product, and with our strong system of property rights, we continues to attract investors from around the globe. Canada and Asian nations are pouring the most money into the U.S. During the four quarters ending in September 2021, Canadians purchased $19.2 billion in U.S. real estate, about one-third of all foreign acquisitions. Bahrain, Germany, Saudi Arabia, Singapore, South Korea, Switzerland, and the United Kingdom each had more than $1 billion in U.S. commercial real estate investment. Industrial acquisitions made up the largest chunk of foreign investor purchases during that period at 34%. Despite the occupancy slump during 2020 and early 2021 (see page 18), office acquisitions came in second at 30%.
In general, these foreign dollars are following the pandemic momentum toward smaller markets. During the four quarters ending in September 2021, foreign investors made more acquisitions in non-major markets like Seattle ($3.2 billion), Atlanta ($2.8 billion), Dallas ($2.3 billion), and Phoenix ($2 billion) than in major markets like Manhattan ($1.9 billion), Washington, D.C. ($1.5 billion), and Los Angeles ($1.4 billion). And foreign investors poured at least $1 billion into 16 other markets.
MIPIM is just one way we’re courting and cultivating international business for our members. For years, NAR has been growing a global network of bilateral real estate partners—109 and counting—in 76 countries. In December I had the honor to attend a bilateral partnership signing ceremony between NAR and TUGEM, a Turkish association. These partnerships aren’t just ceremonial. NAR’s global alliances can help you establish relationships and find referrals. And because our partners must abide by a compatible code of ethics, you can be confident when working across borders. Find an international member, and learn more about NAR’s bilateral partners.
In addition, more than 130 state and local REALTOR® associations have global business councils dedicated to networking and education. They act as community organizations, helping members build partnerships with globally minded businesses, mortgage brokers, attorneys, and others. And they position their association as the voice for global real estate in the local market.
The world has definitely gotten smaller, but that means more opportunity, if you’re ready to grab it.
