Foreign investors left their home turfs in search of returns, according to Pensions & Investments 2008 Real Estate Investment Manager survey, with a total of $39 billion in U.S.-based real estate assets managed for international clients as of June 30 a 39% increase over the previous year.
Also, the number of foreign clients increased 30% to 141,137. Of the 141,137 clients, 140,334 (99%) belong to RREEF Alternative, with 803 from other managers.
U.S. investors were looking internationally for real estate investment opportunities and international investors looked abroad as well, said Sarah Snyder, vice president of Callan Associates Inc., San Francisco. A lot of foreign investors including sovereign wealth funds have been large investors in U.S. managers (real estate) funds.
For example, Norways 1.99 trillion kroner ($353 billion) Government Pension Fund-Global, Oslo, added a 5% allocation to foreign real estate during the 12 months ended June 30.
Many of the top real estate managers handling foreign client assets saw their assets under management nearly double. Blackstone Real Estate, New York, saw such assets rise 97% to $3.2 billion, and Principal Real Estate Investors LLC, Des Moines, Iowa, the leader in terms of assets under management for international clients, rose close to 200% to $4.6 billion.
Morgan Stanleys real estate assets managed for foreign clients increased by 27% to $2.8 billion.Blackstone closed its Real Estate Partners VI, a global real estate fund, at $10.9 billion in April.
In part, foreign investors were attracted by the faltering U.S. dollar, Ms. Snyder said.
The currency has helped as international investors are looking where the opportunities are and taking note that their currency had more purchasing power over last year, Ms. Snyder said.
Sovereign wealth funds also partnered with real estate investment managers to buy trophy real estate in the U.S. Meraas Capital LLC, a private equity firm based in Dubai, in June acquired the General Motors Corp. building in Manhattan for $2.8 billion through a joint venture with Boston Properties LP, a real estate investment trust, and U.S. Real Estate Opportunities I LP, a Goldman Sachs & Co. domestic real estate fund. The governments of Kuwait and Qatar are the principal investors in the Goldman Sachs fund.
Contact Arleen Jacobius at [email protected]