Shopping Cart  |  My Account  |  Log In


 
Without FIRPTA Reform, U.S. Real Estate at Disadvantage
11/9/2011 | By Allen Kenney
The Foreign Investment in Real Property Tax Act (FIRPTA) continues to be an impediment to foreign investment in U.S. REITs, according to James Fetgatter, chief executive of the Association of Foreign Investors in Real Estate. Fetgatter said there are bills in both houses of Congress aimed at amending FIRPTA regulations.

“I think reform has some momentum. The most encouraging sign is that people are talking about it,” he said. “I’ve been doing this job for 20 years. FIRPTA has been around for 25 years. I’ve never seen as much buzz about FIRPTA as I have now.”

Speaking with REIT.com during The Real Estate Roundtable’s fall meeting, Fetgatter said part of the reason for that is because foreign investors today have a lot of choices where they put their money.

“Twenty five years ago, the U.S. was really their only option other than their own country,” he said. “It is a competitive issue now and FIRPTA really puts the U.S. at a disadvantage.”

The key reform issue to impact foreign investment in U.S. REITs is raising the threshold before being subject to FIRPTA from 5 percent to 10 percent, and Fetgatter said the language in the proposed bills would address this issue.

In general, Fetgatter said foreign investment in U.S. real estate has slowed recently.

“Like a lot of U.S. domestic investors, things really slowed down at mid-year when there was a fear of another recession,” he said. “However, there remains a lot of investment coming from Canada and Germany, but Europe has its own set of issues to sort out.”

Fetgatter said the sovereign wealth funds are likely keeping an eye on FIRPTA reform before committing to the U.S. further.

He added that Washington, D.C. and New York City remain the top two targets for foreign investors with San Francisco and Boston as secondary destinations. He said those markets have always been tops on the list for investors, but now the gap between them and the other markets is even more pronounced.
Comments on - Without FIRPTA Reform, U.S. Real Estate at Disadvantage
No Comments To Display.
Showing 0 to 0 of 0 comments | Previous | Next
User Name:
Comment:
Enter Code: *
Thank you for your comment.

Please click here to add more comments.
Related Videos
Related Articles
More Videos from REIT.com
REITs Continue Accumulating Capital
2/16/2012 5:40
Commercial Building Owners Face Uncertain Times
2/10/2012 4:00
U.S. CRE Viewed as Stable, Secure Place to Invest
2/8/2012 3:08
January Payroll Numbers Bode Well for Industrial Sector
2/7/2012 5:46
Dividends Help REITs Outpace Market in January
2/2/2012 3:40
Dividend Growth Potential Key Part of REIT Story
1/30/2012 3:36
Multihousing Momentum to Remain Strong
1/26/2012 4:14
Looking for Low Volatility REIT Stocks
1/19/2012 4:30
Analytics Important to Energy Efficiency Efforts
1/17/2012 4:15
Federal Government Focuses on Sustainable Buildings
1/12/2012 3:45
Advertise | Contact Us | Privacy | Terms of Use
Switch To Mobile Site