Until last year, all of Kensington Realty Advisors Inc.’s investors were based in the U.S.
That has changed, said James S. Smith, managing principal in the firm’s Chicago office.
Foreign assets now account for about 10% of its $1 billion in assets under management.
Kensington invested about 20% of the $300 million, including 50% leverage, invested last year in U.S. real estate by SEDCO Capital, a Jiddah, Saudi Arabia-based firm that makes Shariah compliant investments in senior housing, student housing and industrial properties for Middle East institutional investors.
Last month, Kensington and SEDCO purchased a 97-unit assisted-living and memory-care facility in McKinney, Texas.
This is Kensington’s third joint venture with SEDCO Capital, its first foreign client. The firm has gotten inquiries from other foreign institutional investors, including two Chinese groups that Mr. Smith declined to name.
“A lot of us sometimes complain that the economy is not growing fast enough, but on a relative basis, the U.S. economy looks the best to global investors,” Mr. Smith said. “We do have growth. It may be slow but its steady, and we have a good property title system and investors can invest on a tax-efficient basis.”
Middle East investors are concerned about the political situation in their region.
“Every time there is saber rattling they want to diversify out of the Middle East and look at the U.S.,” Mr. Smith said.