RT Journal Article
SR Electronic
T1 Does Foreign Investment Affect U.S. Office Real Estate Prices?
JF The Journal of Portfolio Management
FD Institutional Investor Journals
SP 38
OP 47
DO 10.3905/jpm.2015.41.6.038
VO 41
IS 6
A1 Pat McAllister
A1 Anupam Nanda
YR 2015
UL https://pm-research.com/content/41/6/38.abstract
AB This article examines the impact of foreign real estate investment on U.S. office market capitalization rates. The geographic unit of analysis is MSA and the time period is 2001–2013. Drawing upon a database of commercial real estate transactions, the authors model the determinants of market capitalization rates with a particular focus on the significance of the proportion of market transactions involving foreign investors. Employing several econometric techniques to analyze the data, the results suggest statistically significant effects of foreign investment across 38 U.S. metro areas. It is estimated that, all else equal, a 100 basis point increase in foreign share of total investment in a U.S. metropolitan office market causes about an 8 basis point decrease in the market cap rate.TOPICS: Real estate, developed, fundamental equity analysis