International Investors Look to U.S. Real Estate

Foreign investors continue to be attracted to the real estate market in the United States, according to Paul Curbo, portfolio manager with Invesco Real Estate.

Curbo sat down for a video interview with at REITWorld 2011: NAREIT's Annual Convention For All Things REIT in Dallas at the Hilton Anatole hotel last month to discuss real estate fundamentals.

"If you look at 2011 we are roughly on par to double the amount of foreign investment in the United States as we saw last year," he said.

Curbo attributed this to a number of factors including the declining dollar, which he said has made real estate in the United States cheaper. He added that the positive fundamentals have also played a role in increased international investments.

"If you look at the fundamentals they are fairly attractive. In terms of supply and demand we are not seeing a tremendous amount of economic growth yet but construction is very low," Curbo said.

As a result of worldwide volatility and sovereign debt issue concerns, Curbo said investors are more confident in investing in gateway markets like New York or Washington, DC.

"There's a sense of a bit more stability in what you're purchasing then perhaps some of these other things," he said.

As far as economic indicators that Curbo has his eye one, he said that in terms of property fundamentals, the supply and demand side of real estate, the supply side looks "really good."

"The demand side is going to be driven by job growth, so that's the primary indicator that you're going to watch," he said.

However, Curbo said that there are factors that are more specific to individual sectors. He said in the retail sector investors may look at sales while the industrial sector may look at industrial production or GDP growth.

Client's perceptions of REITs have changed over the years and Curbo said many more investors are attracted to REITs because they like the total return history.

"REITs have done much better than the S&P 500 and much better than the Russell 2000, over long term periods. That's attractive for investors," he said.