A Global Search for Returns

Article by Parke Chapman Via National Real Estate Investor

With so much foreign money pouring into U.S. property markets over the past few years—inflating prices and cutting returns—American investors increasingly are looking offshore for higher yields. There’s just one catch: The spread between U.S. and offshore returns is narrowing. Demand is strong globally, pushing down cap rates, and the ability to move money and market information at the speed of the Internet have left few undiscovered pockets of above-market opportunity.

Still, there is clearly more U.S. money looking for returns abroad. A recent survey by institutional real estate newsletter Real Estate Alert found that a total of 21 domestic operators are overseeing 26 funds that invest solely outside of the U.S. Tishman Speyer Properties, for example, is raising $1.3 billion for a series of funds that will target India, China and Europe. It’s also planning to launch a Brazilian joint venture.

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