When the COVID-19 pandemic raged in 2020, global commercial real estate sales fell 20% from at least $ 2.5 million. While commercial real estate business has declined worldwide, the United States remains the world's largest commercial real estate market, with 16 US metropolises in the 30 largest commercial real estate markets in the world. This emerges from the NAR 2021 Commercial International Real Estate Business Trends Report.
NYC Metro remains the world's largest commercial real estate market
Many world cities saw their commercial real estate transactions decline by more than 20%, including the New York Subway (-41.3%). However, the NYC subway region retained its position as the largest commercial real estate market in the world ($ 28.5 billion). 16 U.S. cities made it into the top 30 commercial real estate markets in the world based on acquisitions of domestic, continental, and global (non-continental, non-domestic) acquisitions in these markets: NYC Metro, LA Metro, SF Metro, Dallas, DC Metro, Boston Metro, Atlanta Metro, Phoenix, Seattle, Chicago, Denver, Miami, Houston, Charlotte, Raleigh / Durham, and Philadelphia.
<img src = "data: image / svg + xml; utf8,"data-src =" https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-top-30-global-commercial-real-estate-markets-2019-and- 2020-bar-chart-04-01-2021-1300w-1449h.png? Itok = iTPZMQYM "class =" b-lazy "width =" 1200 "height =" 1338 "alt =" Bar Chart: Top 30 Global Commercial Real Real Estate Markets, 2019 and 2020 "title =" Bar Chart: Top 30 Global Commercial Real Estate Markets, 2019 and 2020 "/>
Foreign investors are entering secondary markets
With a view to only cross-border capital flows, investors have scaled back their investments in most US markets. However, the cross-border capital flowed into several secondary or tertiary markets in California where the cost of office space and living costs are cheaper than San Francisco or Los Angeles: the Inland Empire (west of LA, including Riverside), Sacramento, San Diego, and the East Bay. Indianapolis also made the list of subway areas where cross-border capital flowed into commercial real estate acquisitions of $ 2.5 million or more.
<img src = "data: image / svg + xml; utf8,"data-src =" https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-top-commercial-real-estate-markets-with-the-largest-cross- Marginal capital inflow 2020 and 2019 bar chart 04-01-2021-1300w-1515h.png? itok = VbFr9tuU "class =" b-lazy "width =" 1200 "height =" 1398 "alt =" Bar chart: Top commercial real estate markets with the largest cross-capital inflow, 2020 and 2019 "title =" Bar chart: Top commercial real estate markets with the largest cross-capital inflow, 2020 and 2019 "/>
Canada, South Korea, and Germany are the largest investors in US commercial real estate
Canada remained the largest source of cross-border capital investment in US commercial real estate ($ 12.4 billion) in 2020, followed by South Korea ($ 5.2 billion) and Germany ($ 4.0 billion). Cross-border inflows into the USA decreased from several countries, with the exception of a significant increase in inflows from South Korea (+ 102.7%), Singapore (+ 18%), Great Britain (+ 15%), France (+ 18%). and Sweden (+ 63%).
<img src = "data: image / svg + xml; utf8,"data-src =" https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-top-countries-investing-in-us-commercial-real-estate-2019- and-2020-bar-chart-04-01-2021-1300w-1300h.png? itok = dghjRfZL "class =" b-lazy "width =" 1200 "height =" 1200 "alt =" Bar Chart: Top Countries Investing in US Commercial Real Estate, 2019 and 2020 "title =" Bar Chart: Top Countries Investing in US Commercial Real Estate Investing, 2019 and 2020 "/>
Cross-border acquisitions are shifting towards industrial and multi-family assets
Foreign investors are increasingly investing in multi-family and industrial properties. Commercial property purchases accounted for 31% of cross-border capital flows, followed by apartment buildings with 27% and office buildings in central business districts with 20%.
In 2020, cross-border acquisitions declined in all property types, with the exception of industrial acquisitions, which grew 62% to $ 10.8 billion ($ 6.7 billion in 2019).
Foreign investors have switched from retail to industrial acquisitions. Retail property acquisitions have declined sharply since 2018, when acquisitions peaked at $ 29.2 billion in 2018, or 31% of cross-border flows. Conversely, the share of industrial acquisitions in total cross-border flows rose from 17% to 30% in the same period.
<img src = "data: image / svg + xml; utf8,"data-src =" https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-acquisitions-of-cross-border-capital-by-property-type-q1- 2018-to-q4-2020-line-diagram-04-01-2021-1300w-987h.png? Itok = RqplustWU "class =" b-lazy "width =" 1200 "height =" 911 "alt =" Line chart: Acquisition of cross-border capital by property type, Q1 2018 to Q4 2020 "title =" Line chart: Acquisition of cross-border capital by property type, 1st quarter 2018 to 4th quarter 2020 "/>
74% of commercial NAR members expect the international real estate business to recover by 2023
The US commercial real estate market remains the world's largest commercial real estate market. As in other countries, the pandemic has impacted commercial real estate transactions. However, these effects are temporary, especially given the accelerated distribution of vaccines, which is expected to be completed in summer 2021. 78 percent of NAR commercial members are optimistic that if it does, their international business will return to pre-pandemic levels by 2023.
<img src = "data: image / svg + xml; utf8,"data-src =" https://cdn.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-percent-of-nar-commercial-members-who-expect-international-business- Transactions-to-restore-2021-to-2023-bar-chart-04-01-2021-1300w-768h.png? itok = lFHK4zOb "class =" b-lazy "width =" 1200 "height =" 709 "alt =" Bar chart: Percentage of commercial NAR members expecting international business recovery between 2021 and 2023 "title =" Bar chart : Percentage of commercial NAR members who expect international business transactions to recover in 2021-2023 "/>
Register for the NAR C5 Summit!
The C-5 is the leading commercial real estate event in the US, starting in the fall of 2021 in the heart of the city at the heart of the industry – New York. Come for three days for networking, learning and completing September 27-29, 2021. Registration is now open.