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As COVID-19 travel restrictions began to lift last year, foreign investors flocked back to U.S. commercial real estate. Foreign investments exceeded pre-pandemic levels in 2021, a new report from Real Capital Analytics shows.
Foreign investors purchased $70.8 billion of U.S. commercial real estate in 2021. That marks the highest total since 2018’s $94.6 billion.
The countries most represented in international U.S. commercial investments in 2021 were Canada, Singapore, South Korea, and the United Kingdom, according to the report.
Investors did shift their focus in 2021 away from traditional investments like office buildings and hotels in major cities such as New York, San Francisco, and Chicago. Instead, last year, they were drawn to growing sectors like warehouses, rental apartments, and specialized office buildings for pharmaceutical businesses, The Wall Street Journal reports. Investors also changed up their target markets, homing in on the Sunbelt and smaller markets over coastal cities last year.
“It is a different world,” Riaz Cassum, global head of international capital coverage for JLL, a commercial property firm, told The Wall Street Journal. “You’re starting to see big institutional investors looking at Dallas, Charlotte, Denver, Nashville, Austin, and other high-growth, low-tax markets.”