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Foreign investment in commercial real estate in Florida cities such as Miami and Tampa has risen to its highest level in a decade, fueled by investor desire to find “safe havens” for capital.
A new study by commercial services firm CBRE Inc. found that Florida last year ranked fourth nationwide in so-called “cross-border capital” and the state improved to third across the country in the initial three months of this year.
In all, foreign investors plunged $4.3 billion into Sunshine State commercial real estate in 2015, an 85% increase from the year before, CBRE's report notes. Of that 2015 total, the Tampa market received $540 million, the highest level since 2007.
“Florida has been an attractive destination for foreign buyers thanks to its high rates of job creation and economic growth,” says Quinn Eddins, the company's director of research and analysis in Florida.
Eddins also cited the state's deep cultural and economic ties to Latin America for a primary reason of the influx of capital.
In the Tampa area, Canadian investors have been a premier source of foreign capital over the past decade. Canadian real estate buyers accounted for 42% of all foreign purchases — or $957 million.
CBRE also notes foreign buyers as a class seem to favor multifamily product, with $730 million in total deals completed since 2007, roughly accounting for one-third of all transaction types. Retail deals account for about 30% of all foreign transactions, the report states.
But don't expect the foreign capital flow to continue unabated. CBRE predicts such investment in Florida will “moderate” this year, especially as compared to 2015.
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