Foreign investors continue to pump more dollars into industrial real estate, with the city of Detroit seeing an especially impressive amount of investment money.
According to the latest research from CBRE, foreign investors have acquired nearly $61 billion in U.S. industrial real estate since 2010. Investors based in the Asia-Pacific region have been especially active, contributing 48 percent of this amount. Investors from Canada were also active, investing more than $17 billion in U.S. industrial real estate assets during this time.
Foreign investment in U.S. industrial real estate has increased by an annual average of 67 percent since 2010, according to CBRE. Detroit has been one of the main beneficiaries for this investment activity. CBRE reported that the Detroit area has received $166.9 million in foreign capital since 2010.
“Foreign investors have recognized the strength of the Detroit market and the revitalization that has taken place, especially in the CBD,” said Anne Galbraith Kohn, senior vice president with CBRE’s Investment and Institutional Properties Group in Detroit, in a written statement. “The growth of health care, education and technology-related companies compliments the existing employment base, adding to the area’s stable and diverse economy.”
Los Angeles has attracted the most foreign capital since 2010, $1.4 billion.
A key driver of demand for industrial real estate has been e-commerce growth, with CBRE reporting that $1 billion in e-commerce sales translates into 1.25 million square feet net absorption of industrial and logistics space. Although showing slower growth, industrial rental rates are near record levels, and the competition among institutional buyers for industrial properties has remained strong, CBRE added.