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Outflows of commercial investment capital in the United States have now surpassed inflows, reversing course.

According to CBRE, this is the first time since 2014.

With the world's longest economic expansion on record, foreign commercial property investors are faced with a more difficult calculation in finding cost-effective opportunities for future downturn defense while also slowing cross-border capital flows. find property qatar

As a result, CBRE reported this week that inbound capital to the United States fell 54% in 2019, owing to a dramatic drop in entity-level revenues, which are notoriously volatile from year to year.

Rising U.S. interest rates and discounted REIT share prices helped entity-level sales account for an impressive 51 percent of overall inbound volume in 2018. However, when these patterns reversed in 2019, this percentage fell to just 6%. With entity-level transactions excluded, inbound investment fell by a more modest 12.1 percent in 2019.

With capital outflows from the United States down just 1% from 2018, the amount of money invested in international real estate markets by US investors surpassed inbound capital by nearly $18 billion in 2019.

In the first half of 2019, sovereign wealth funds, insurance companies, and pension funds (SWIP) accounted for 30% of inbound volume in primary markets, compared to just 3% in secondary markets.

Foreign investors are also expanding into secondary and tertiary markets, though proximity to gateway markets remains the preferred venue. Industrial hubs and multifamily markets with a strong demographic are also common these days.

The share of U.S. outbound investment in international multifamily and industrial assets has increased dramatically since the previous cycle, mirroring domestic cross-border investment patterns. The share of total outbound capital devoted to office investment has decreased the most as these sectors grow.

With the exception of the United Kingdom, US investors deployed less money to all top international destinations in H1 2019 than they did in H1 2018. In the current period, however, major changes in outbound volume to these countries have been the rule.

Despite the fact that outbound investment from the United States has slowed in many of the traditional top destination countries, some markets within those countries, such as Helsinki, Osaka, Barcelona, Berlin, and Shanghai, continue to see significant volume growth.

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