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U.S. CRE Viewed as Stable, Secure Place to Invest

02/08/2012 | By Carisa Chappell

Foreign investors view the U.S. as a more favorable place to invest today than it has been in the past five years, according to Jim Fetgatter, chief executive of the Association of Foreign Investors in Real Estate (AFIRE).

In a video interview with REIT.com at the NAREIT headquarters in Washington, D.C., Fetgatter shared some of the results of the association's 20th Annual Foreign Investment Survey.

He said that the U.S., which at one point had always scored highly in the annual survey as a stable, secure place to invest, has suffered from a decreasing score in recent years.

"That score has been gong down significantly in the past five years," Fetgatter says. "For some reason this year it went back up. Perhaps it's in comparison to other parts of the world but nevertheless they view it as being more stable and secure."

Additionally Fetgatter said that investors also perceive the U.S. as a place for less possibility of capital appreciation. He said the perception is that all of the appreciation has gone out of the capital markets that they want to invest in.

When it comes to countries that investors view as some of the more favorable emerging markets, Brazil was the most popular survey response, according to Fetgatter.

"That was a surprise to us all," he said, adding that investors are also still favorable on China.

"There were more countries listed in their responses this year than there has been in the last several years. They've been very conservative in which emerging markets they're thinking about going into," he said.

In terms of U.S. investments however, Fetgatter said the survey results still primarily favored the major gateway cities such as Washington, New York, San Francisco, Los Angeles, and Boston.

"They have not really spread out to any other city, at least as not as far as office and retail are concerned. Some are investing in secondary cities if they can buy a portfolio of multifamily housing," Fetgatter said.