05/26/2017 | by
Allen Kenney

Michael Schwartz of RSM says foreign capital not deterred by rate hikes.


In the latest episode of The REIT Report: NAREIT's Weekly Podcast, Michael Schwartz, principal with RSM, discussed trends in foreign investment in U.S. real estate.

Schwartz offered his thoughts on the impact of changes to the rules from the Foreign Investment in Real Property Tax Act (FIRPTA). He noted that the reforms have played a role in stimulating demand in U.S. real estate from abroad, albeit not an overwhelming one.

In terms of other factors driving that demand, Schwartz cited the limited number of opportunities available in the Asian real estate markets. He pointed out that secondary markets outside the gateway cities in the U.S. are relatively strong.

“The U.S. provides for such a depth and breadth of investment possibilities,” he said, “both from the product type as well as the markets.”

Foreign investors are showing particularly high interest in industrial real estate assets, according to Schwartz. Office buildings in major markets also remain popular, he said.

Schwartz also mentioned that the Federal Reserve’s monetary policy moves haven’t scared away interest.

“Interest rates are not a huge factor,” he said. “Folks are already taking consideration in their underwriting.”

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