Download florida: a destination for global capital

2016 | CBRE FLORIDA RESEARCH
FLORIDA: A DESTINATION
FOR GLOBAL CAPITAL
Foreign investment has poured into Florida’s
commercial real estate markets in recent
years. What is driving it, and will it last?
Key
Takeaways
Over the past two years, cross-border capital flows into the U.S. have increased
significantly. In 2015 alone, $78 billion was recorded, a record year and up 112%
over 2014.
The state of Florida has proven to be an important destination for cross-border
capital coming into the U.S. In 2015, Florida ranked fourth in terms of crossborder investment volume. In Q1 2016, it ranked third.
Globally, cross-border commercial property investment has been bolstered
by low interest rates, low inflation, growth in developing countries and a
need for investors to diversify with a greater allocation to real estate.
Investors from Latin America and Spain are drawn to South Florida due to strong
cultural and linguistic connections to their home countries.
Currency fluctuations influence investment strategies in some instances, but to
date the overall volume of cross-border capital entering the state has increased
despite the strong U.S. dollar.
According to CBRE professionals, Middle Eastern buyers are purchasing
commercial real estate in the U.S. in search of yield and a safe haven for
capital.
Chinese investors entered Florida markets, particularly South Florida, in
2014 with a number of notable development site acquisitions in Miami.
South Florida is a major destination for foreign buyers, particularly the
emerging gateway market of Miami. South Florida has received more
than 60% of the cross-border capital entering the state since 2007.
In 2016, foreign investment in Florida commercial real estate is
expected to moderate compared to the blistering pace set in 2015, but
to remain elevated relative to historical transaction volumes.
Foreign investors placing capital in the rest of the state are typically
searching for higher yield and better returns, specifically in the
markets of Tampa, Orlando and Jacksonville.
2
FLORIDA: A DESTINATION FOR GLOBAL CAPITAL | CBRE FLORIDA RESEARCH
© 2016 CBRE, Inc.
3
Drivers of Foreign Investment: Global & Local
The oil glut has impacted Middle Eastern markets that
plan budgets and expenditures on the basis of expected
commodity prices. 3 Given their heavy reliance on oil
commodities, Middle Eastern investors have diversified,
in part, by investing in commercial real estate globally.
International capital flows provide a measure of the
overall health of the property investment market.1
Over the past two years, cross-border capital flows into
the U.S. have increased significantly. In 2015 alone,
$78 billion was recorded–a record year and up 112%
over 2014. Data from Q1 2016 ($7.8 billion) suggests a
cooling but stable outlook for 2016. The state of Florida
has proven to be an important destination for crossborder capital coming into the U.S. In Q1 2016, the
state was ranked third in terms of total cross-border
investment volume–up from its fourth ranked position
in 2015.
Latin American countries have experienced a spectrum
of economic trends from moderate expansion (Mexico
and Chile) to deep recession (Brazil).4 Recently, the
reduction in China’s demand for commodities has
weighed on Latin American economies, with Brazil
taking a particularly hard hit.5 Brazil is experiencing
a deep recession with currency devaluation, slowing
growth, rising inflation and falling commodity prices.
In general, Latin America remains in a low-growth
mode and many investors from the region have sought
out U.S. commercial real estate as a safe haven for their
capital.
Globally, cross-border real estate investment has been
bolstered by low interest rates, low inflation, growth
in developing countries and a need for investors
to diversify with a greater allocation to real estate.
However, regional differences have had an impact
on the relative volume of cross-border transactions.
Recent signs of recovery in the Eurozone economy,
including increased business investment and consumer
spending after years of slow economic growth and high
unemployment, have helped spur European investment
in U.S. property markets. Britain’s decision to leave
the European Union has heightened uncertainty in an
already skittish global economy, but the consequences
of the Brexit will take many months to play out. In the
short run, the uncertainty could increase demand for
assets in U.S. gateway cities, which are likely to be seen
as relatively safe havens for global capital.
1
CBRE Research, Global Real Estate Market Outlook, February 2016.
2
CBRE Research, Global Office Rent Cycle MarketView, Q1 2016.
3
CBRE Research, In and Out: Middle East 2015.
4
CBRE Research, Americas Real Estate Market Outlook 2016.
4
Cross-Border Capital Flows
Into Florida
Source: CBRE Research,
Real Capital Analytics,
Q1 2016.
$2.9B
The Miami Herald, Latin American Economies Continue to Limp Along,
March 23, 2016.
6
NAIOP, Cross-Border Investment in U.S. Commercial Real Estate, Spring
2016.
FLORIDA: A DESTINATION FOR GLOBAL CAPITAL | CBRE FLORIDA RESEARCH
$1.4B
$577 M
2007
2008
2009
$1.7B
$1.2B
$883M
2010
$734M
2011
2012
2013
2014
2015 Q1 2016
Last year, Florida ranked fourth
among U.S. states for crossborder capital flows, following
New York, California and Texas.
1.
2.
3.
4.
5.
Cross-border investment in U.S. commercial real estate
increased markedly in 2015, when transaction volume
reached $78 billion–a 112% increase year over year.
According to CBRE capital markets professionals,
foreign investors are particularly attracted to U.S.
markets due to the relatively favorable economy, healthy
property fundamentals, higher asset yields, lower longterm return volatility and opportunity for scale. U.S.
5
$2.6B
$1.5B
Canadian capital represents the largest share of crossborder investment entering the U.S. With a limited
number of dense population centers and real estate
assets in which to invest domestically, Canadian
investors flood U.S. markets. Energy sector contraction
dampened the Canadian economy in 2015, stalling job
and GDP growth, and weakening the Canadian dollar.
Risk-adjusted returns are greater from U.S. investments
than those found in Canada, and with recent GDP
growth, the U.S. continues to see robust demand from
Canadian buyers for commercial real estate assets.6
In Asia, excess global savings, low bond yields and an
under-allocation to real estate have prompted robust
investment in global real estate markets over the past
six years. The relatively recent economic slowdown
in China has had a significant impact on the global
economy; however, the region is showing signs of
recovery after several rounds of interest rate stimulus
and increased credit availability.
$4.3B
FIGURE 1
NY$20.97
CA$11.89
TX$6.04
FL$4.35
DC$2.89
6. GA$2.85
7. MA$2.82
8. IL$2.56
9. WA$2.51
10.HI$1.97
2015 Sales Volume (Billions of USD)
Source: CBRE Research, Real Capital Analytics, Q1 2016.
© 2016 CBRE, Inc.
5
markets also provide international buyers with the opportunity
to diversify portfolios and preserve capital.7 Cross-border capital
flows into the U.S. will be bolstered by recent changes to the
Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) that
exempt overseas pension funds from the 35% withholding tax on
proceeds of real estate dispositions.
Last year, Florida ranked fourth among U.S. states for cross-border
capital flows, following New York, California and Texas. In the first
quarter of 2016, it moved into the third slot, now just trailing New
York and California.
FIGURE 2
Capital invested into asset type
Cross-Border Capital
Entering Florida by Global
Region
Office
Retail
Hotel
Dev. Site
Industrial
Apartment
Senior Housing
From 2010 to 2016
NORTH AMERICA (EXCLUDING U.S.)
$4.8B (37%)
ASIA
$1.7B (14%)
MIDDLE EAST
$1.2B (9%)
The state has been a particularly attractive destination for foreign
buyers thanks to its exceptionally high rates of job creation and
economic growth. Florida added 260,600 non-farm jobs during
the 12 months ending May 2016, more than any other state except
California.8 The state’s 3.22% year-over-year rate of employment
growth ranked third in the country and far outpaced the national
rate of 1.66%. Florida’s real gross domestic product increased 3.4%
between Q4 2014 and Q4 2015, putting the state in a tie with Utah
for third place (behind California and Oregon) and well ahead of
the national growth rate of 2%.9
Florida’s consumer economy has been expanding rapidly thanks
in part to strong population growth and tourism. A well-known
tourist destination for both domestic and international travelers,
Florida received more than 106 million visitors in 2015 and a
record-breaking 29.8 million tourists in the first quarter of 2016.10
Florida also owes its strong economic growth to its businessfriendly environment with pro-business sales tax policies and a
competitive cost of doing business. Home to the nation’s third
largest workforce, Florida offers a deep pool of talented workers to
employers.11
EUROPE
$3.8B (30%)
SOUTH AMERICA
$1.2B (9%)
PACIFIC
$159M (1%)
The state is also home to many regional and global headquarters
thanks to its strategic location and strong global connections
in trade, culture and business. Florida is a leader in attracting
foreign direct investment, ranking sixth among all U.S. states in
employment by majority foreign-owned firms.12 Its infrastructure
provides an important link for commerce on a global scale with 15
deep-water seaports, 19 commercial airports and numerous inland
ports and multimodal connection points.
7
CBRE Research, United States of America Capital Markets MarketView,
Q1 2016.
10
Visit Florida Research, Q1 2016. http://www.visitfloridamediablog.com/
home/florida-facts/research/
8
Bureau of Labor Statistics, May 2016.
11
Enterprise Florida. https://www.enterpriseflorida.com
9
Bureau of Economic Analysis, Q4 2015.
12
Enterprise Florida. https://www.enterpriseflorida.com
6
FLORIDA: A DESTINATION FOR GLOBAL CAPITAL | CBRE FLORIDA RESEARCH
Source: CBRE Research, Real Capital Analytics, Q1 2016.
© 2016 CBRE, Inc.
7
An Emerging Gateway Market
South Florida is a major destination for foreign
buyers, particularly the emerging gateway market
of Miami. South Florida has received more than
60% of the cross-border capital entering the state
since 2007.
Miami is an emerging global hub for culture,
trade, business and investment. Over the past two
decades, Miami has developed into a preeminent
destination for international elites in finance,
commerce and the arts. This transformation has
had many drivers, but a key catalyst is Miami’s
emergence on the international art circuit, which
has facilitated the opening of dozens of art
galleries, museums and luxury shopping districts.
In the process, Miami’s profile has increased
among global high-net-worth individuals, and
many have purchased vacation homes and
luxury condominiums in the market. This, in
turn, has facilitated cross-border investment in
Miami’s commercial real estate market, as foreign
investment managers and their affluent clients are
already familiar with the city.
Miami is also an attractive destination for
investment because it is affordable on a relative
cost basis compared to other global gateway cities.
The market is perceived by some foreign investors
FIGURE 3
Foreign Investment and International
Arrivals at Area Airports
Annual International Passengers
Arriving at South Florida Airports
Source: CBRE Research, Real Capital Analytics, Q1 2016
and United States Department of Transportation Bureau of
Transportation Statistics, November 2015.
Cross-border Capital Entering
South Florida
MILLION
Passengers
$2.7
IN 2014
12
$2.2
11
$1.7
10
$1.2
9
$0.7
8
7
2007
2008
2009
2010
2011
2012
2013
2014
2015*
Sales Volume (Billions of USD)
Passengers (Millions)
13
$0.2
as a relatively young city with promising growth
potential. With a population of nearly 2.7 million
in Miami-Dade County (more than 6 million in
the South Florida region), it is small compared to
other major global and U.S. markets, making it
attractive to foreign investors interested in having
a stake in a city that is seen as still early in its
development.
Foreign investors placing capital in the rest of
the state are typically searching for higher yield
and better returns, specifically in the markets of
Tampa, Orlando and Jacksonville. These markets
have strong fundamentals that are continue to
improve and offer investors a significant value-add
at higher cap rates. Orlando is the most soughtafter destination following South Florida (by
sales volume) in large part due to record-breaking
tourism with 66 million visitors in 2015–the most
of any U.S. city in one year.13 Skyrocketing tourism
helps attract foreign investment by driving strong
economic growth, which investors like to see,
and by enhancing Orlando’s global brand, which
builds familiarity with the market among foreign
investors.
13
Visit Orlando Research, Q1 2016.
* 2015 passenger data through November
8
FLORIDA: A DESTINATION FOR GLOBAL CAPITAL | CBRE FLORIDA RESEARCH
© 2016 CBRE, Inc.
9
Strong Ties to
Latin America
FIGURE 4
$703M
Latin American Cross-Border
Capital Entering South Florida
Source: CBRE Research, Real Capital Analytics, Q1 2016.
$314M
$58M
$153M
2007
2008
$243M
$197M
2009
$28M
$43M
2010
2011
$181M
$169M
2012
2013
2014
2015
Q1 2016
Miami is an extremely diverse
and multicultural city with
strong linguistic and cultural
ties to Latin America and the
Iberian Peninsula.
10
FLORIDA: A DESTINATION FOR GLOBAL CAPITAL | CBRE FLORIDA RESEARCH
© 2016 CBRE, Inc.
Miami is an extremely diverse and
multicultural city with strong linguistic
and cultural ties to Latin America and
the Iberian Peninsula. Spanish- and
Portuguese-speaking investors, many of
whom have visited and even purchased
vacation homes in the city, are intimately
familiar with the market and enjoy
spending time there. This familiarity,
coupled with direct flights into Miami
International Airport, have facilitated
Latin American, Spanish and Portuguese
investment in South Florida real estate.
Private buyers dominate Latin American
investment in Miami’s commercial real
estate markets. Wealth preservation
and the desire to establish a personal
or family connection to the city are
frequently priorities for these buyers,
and their investment strategies,
intended holding periods, and required
returns can differ significantly from
institutional buyers and other private
investors. In some instances they are
willing to offer generous bids to obtain
properties and development sites, and
are able to hold these sites for extended
periods as they wait for the right
development opportunity.
11
$1.10
$1,400
$1.00
$1,200
$0.90
$1,000
$800
$0.80
$600
$0.70
$400
$0.60
$200
$0
2007
2008
2009
2010
2011
2012
2013
Sales Volume (Millions of USD)
Canadian Investment in Florida
Commercial Real Estate (left axis)
2014
2015
2016
$0.50
U.S. Dollars per 1
Canadian Dollar (right axis)
$400
$1.55
$350
$300
$1.45
$250
$1.35
$200
$1.25
$150
$1.15
$100
$1.05
$50
$0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
$0.60
$250
$0.45
$150
$0.40
$100
$0.35
$0.30
$50
$0
$0.25
2007
2008
2009
2010
2011
Brazilian Investment in Florida
Commercial Real Estate (left axis)
2012
2013
2014
2015
2016
$0.20
U.S. Dollars per 1 Brazilian Real
(right axis)
FLORIDA: A DESTINATION FOR GLOBAL CAPITAL | CBRE FLORIDA RESEARCH
Middle Eastern Investment in Florida
Commercial Real Estate (left axis)
$500
Q4 Brent Price (right axis)
$450
$100
$400
$350
$80
$300
$250
$60
$200
$40
$150
$100
$20
$50
$0
$120
Oil Prices (USD/gallon)
$0.50
Exchange Rate (USD)
$0.55
$200
CBRE Research, In and Out: Middle East 2015.
Brent Oil Pricing and Middle
Eastern Investment
U.S. Dollars per 1 Euro
(right axis)
German Investment in Florida
Commercial Real Estate (left axis)
14
FIGURE 6
$0.95
Source: CBRE Research, Real Capital Analytics, and Board of Governors of the Federal
Reserve System, May 2016.
12
Since 2014, Middle Eastern acquisitions of
commercial property in the U.S. have increased as
falling oil prices have prompted Middle Eastern
buyers to search for yield and a safe haven for
their capital. Florida has received a share of this
investment, particularly in the form of hotel,
multifamily and industrial acquisitions. Large
industrial and multifamily portfolio acquisitions by
institutional buyers and sovereign wealth funds have
helped drive the increase in sales volume. Private,
non-institutional investors are expected to become
more active in an attempt to diversify their assets as
oil prices remain low.14
Sales Volume (Millions of USD)
Sales Volume (Millions of USD)
$1,600
Exchange Rate (USD)
Notwithstanding the growth in
Canadian, German and Brazilian
investment over the past two years, the
strong dollar is a headwind for crossborder investment in the U.S., and
though overall investment from these
countries has grown, it probably would
have grown more if exchange rates had
been more favorable.
Exchange Rates and Cross-Border
Capital Volume
Exchange Rate (USD)
To date, overall investment by top
buyers such as Canada, Germany and
Brazil has shown little sign of tapering
in response to the relative strength
of the U.S. dollar. Total Canadian
investment in Florida properties has
not diminished, thanks largely to
strong demand for U.S. assets among
Canadian multifamily investors.
Canadian law caps rent growth for
apartments, spurring demand for
multifamily assets in the U.S. German
investors continued to acquire
properties in 2015 despite a dip in the
strength of the Euro. And in the face
of a tumbling Real, private Brazilian
buyers continued to purchase office
properties in Orlando and Miami,
pushing 2014 and 2015 sales volumes
to record levels. In the case of Brazil, a
deep recession and the desire to move
capital into secure, dollar-denominated
assets likely trumps concerns over
declining exchange rates due to the
devaluation of the local currency.
Middle Eastern
Investors Seek to
Diversify
FIGURE 5
Sales Volume (Millions of USD)
No Pullback Due
to Exchange
Rates, Yet
2007
2008
2009
2010
2011
2012
2013
2014
2015
Q1 2016
$0
Source: CBRE Research, Real Capital Analytics, and Investing.com, Q1 2016.
© 2016 CBRE, Inc.
13
Growing Asian
Investment
Treasury Action Could
Increase Visibility of CrossBorder Investment
Chinese investors entered Florida markets in
2014 with a number of notable development site
acquisitions in Miami. Developable land is appealing
to these buyers, who have gained experience in
the commercial development arena at home.
Now that the first wave of Chinese investors has
established South Florida as a familiar destination
for investment, more Chinese capital is expected
in the future, especially as financial market
liberalization allows investors to increase the
international diversification of their portfolios.
However, the volume of Chinese investment will, in
part, depend on access to Florida’s markets. A direct
flight to Miami International Airport would enhance
connectivity between the regions. EB-5 investment
will also play a vital role in attracting more crossborder capital from China.
EB-5
Florida ranks sixth in the nation in terms of EB-5 investment.15 The EB-5
program provides foreign investors permanent residence in the U.S.
in exchange for investment in a commercial enterprise that creates or
preserves at least 10 permanent full-time jobs.16 EB-5 investment has grown
rapidly since the program’s inception in 1990, and it has expanded tenfold since 2009 when other sources of capital dried up due to the financial
crisis. In Florida, there are 78 regional centers that facilitate immigration
for foreign investors and partner with local developers to raise capital and
market investment projects. Common commercial property investments in
the state include mixed-use, hotels, senior housing and schools. Based on
recently completed and proposed projects, regional centers in Florida are
primarily marketing to Chinese, Latin American and Indian investors.
15
FY2010-FY2013 EB-5 Investment CBRE Research, IIUSA, Q3 2015.
16
U.S. Citizenship and Immigration Services. https://www.uscis.gov/eb-5
14
Real estate professionals who wish to identify the true owners of
real estate assets may benefit from regulations and legislation
recently proposed by the U.S. Department of the Treasury to
prevent money laundering and tax evasion. Cross-border capital
flows into the U.S. are probably much greater than currently
available data sources indicate, as many off-shore buyers
purchase real estate using shell companies that mask their
identity. The U.S. Treasury’s Financial Crimes Enforcement
Network Customer Due Diligence (CDD) Final Rule is aimed at
strengthening financial transparency and will require financial
institutions to verify the true owner, or “beneficial owner,” who
controls and profits from those companies (at a minimum 25%
ownership) at the time they open an account. The CDD Final
Rule (effective May 2018) may provide greater transparency
regarding ownership and a path towards greater visibility into
cross-border capital flows.
EB-5 Investment
2010- 2013, Top 10 States
California
$1,174,047,040
New York
$1,069,722,874
Pennsylvania
$684,220,632
South Dakota
$299,500,000
Texas
$251,016,786
Florida$218,500,000
Vermont
$195,758,333
Maryland
$167,883,421
D.C.
$165,039,452
Washington
$159,750,000
Source: FY2010-FY2013 EB-5 Investment CBRE
Research, IIUSA, Q3 2015.
FLORIDA: A DESTINATION FOR GLOBAL CAPITAL | CBRE FLORIDA RESEARCH
Outlook
In 2016, foreign investment in Florida is expected to moderate compared to 2015, but remain elevated
relative to historical transaction volumes. Rates of investment will vary, however, depending on the asset
type and the origin of the capital. For example, activity from Latin America may wane in 2016 due to
weakening economies in many countries. Land acquisition may slow in South Florida due to saturation of
multifamily supply, particularly condominiums. Canadian and Middle Eastern capital flows may temper due
to continued low oil prices, however these buyers will likely continue to pursue portfolio sales of core assets.
Miami will continue to be a primary market for cross-border investors coming into the state. FIRPTA is
expected to enhance cross-border transaction volume nationally and Florida will share in the benefit of the
tax exemption.
Heightened uncertainty in the global economy following the U.K.’s decision to leave the European Union
will enhance the allure of U.S. real estate markets as safe havens for global capital in the near term. Primary
gateway markets will receive the most interest from foreign buyers, but Florida, and Miami in particular,
should benefit as well. Looking ahead, future effects will depend on the process and outcome of exit
negotiations between the U.K. and E.U. In a broad sense, Brexit would only be disruptive for U.S. real estate
markets in a worst-case scenario.
© 2016 CBRE, Inc.
15
Appendix
16
FLORIDA: A DESTINATION FOR GLOBAL CAPITAL | CBRE FLORIDA RESEARCH
© 2016 CBRE, Inc.
17
Florida
South Florida
• Cross-border capital flows into the state of
Florida in 2015 reached more than $4.3 billion,
significantly outpacing 2014.
• German investment activity in the state has
been steady since 2007, totaling nearly $1.3
billion. Investors from this country have by far
favored shopping centers with $686 million spent
predominately in South Florida markets.
• Canadians have been the most active foreign
investors in Florida since 2007, having invested
$5.1 billion statewide across all asset types. They
have demonstrated a preference for multifamily
assets, having purchased $2 billion worth of
apartments during the period.
• Foreign investment in development sites has
increased significantly since 2011. Sales volume
since 2011 has totaled $855 million, versus $219
million during the prior four years.
• Foreign capital surged in 2015 with nearly $2.6
billion in sales volume. The 2015 total represents
a 65% increase over the previous year.
property type. In 2015 office properties attracted
the greatest cross-border sales volume, with $630
million in acquisitions.
• Canadian investors have been the most active,
followed by significant investment activity from
Germany and Spain.
• Miami leads the region both in terms of sales
volume and transaction count, followed by
Broward County and then Palm Beach County.
Miami has also experienced higher average
annual growth in cross-border capital since 2007.
• Since 2007, South Florida’s retail and hotel
markets have each attracted nearly $2.4 billion
in cross-border capital, more than any other
Cross-Border Sales by Geographic Origin of Capital
Cross-Border Sales by Geographic Origin of Capital
Other Middle East
4,500
Other Asia
Other Europe
4,000
Other South America
3,500
Other North America
3,000
Qatar
Norway
2,500
Netherlands
2,000
Brazil
1,500
Singapore
Argentina
1,000
United Arab Emirates
500
Spain
2007
2008
2009
5,000
2010
2011
2012
2013
2014
2015
Q1 2016
Other Asia
2,500
Other Europe
Other South America
2,000
Other North America
Brazil
1,500
Switzerland
Malaysia
United Kingdom
1,000
Argentina
United Arab Emirates
500
Australia
Spain
0
Canada
2007
2008
2009
2010
3,000
Cross-Border Sales by Asset Type
4,500
2011
2012
2013
2014
2015
Q1 2016
2015
Q1 2016
Germany
Canada
Cross-Border Sales by Asset Type
2,500
4,000
Sales Volume (Millions of USD)
Sales Volume (Millions of USD)
Other Middle East
Germany
0
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2007
2008
2009
Office
18
Other Pacific
3,000
Sales Volume (Millions of USD)
Sales Volume (Millions of USD)
Other Pacific
5,000
Retail
2010
2011
Industrial
Apartment
2012
Hotel
2013
Senior Lvg
2014
Development Site
2015
Q1 2016
Source: CBRE Research,
Real Capital Analytics,
Q1 2016.
FLORIDA: A DESTINATION FOR GLOBAL CAPITAL | CBRE FLORIDA RESEARCH
2,000
1,500
1,000
500
0
2007
2008
2009
Office
© 2016 CBRE, Inc.
2010
Retail
Industrial
2011
Apartment
2012
Hotel
2013
2014
Senior Lvg
Development Site
Source: CBRE Research,
Real Capital Analytics,
Q1 2016.
19
Miami
Broward County
• Cross-border investment in Miami commercial real
estate surged in 2015 to $1.8 billion, more than
double the foreign investment during 2014 and well
above the prior cycle’s peak of $1.1 billion in 2008.
• Five countries stand out for their contributions to
cross-border investment in Miami since 2007: Spain,
United Arab Emirates (UAE), Germany, Argentina
and Malaysia, in order of investment total.
• Cross-border investment in Miami development sites
has been robust since 2008 with a steep increase in
sales volume in 2014.
• Cross-border investors have shown a strong
preference for office and hotel properties. Foreign
investment in office assets increased significantly
in 2015, totaling $395 million and accounting for
more than 28% of total cross-border sales volume
from 2007 to Q1 2016. Hotels accounted for
25% of foreign capital sales volume over the same
period.
• Foreign investment in Broward County commercial
property reached $560 million in 2015, marking
the second year in a row in which foreign capital
flows exceeded half a billion dollars.
• Since 2007, investments in multifamily assets have
dominated cross-border capital flows into Broward
County, with a dollar volume of $733 million
representing 28% of total inflows.
• Since 2007, Canadian investment in the Broward
County market has totaled $1.2 billion, representing
nearly 49% of all cross-border investment during
the period.
• Hotel assets in Broward County have attracted $661
million in cross-border capital since 2007.
Cross-Border Sales by Geographic Origin of Capital
Cross-Border Sales by Geographic Origin of Capital
Other S. America
1,400
Other N. America
1,200
Qatar
Japan
1,000
Brazil
800
Australia
600
Malaysia
400
Canada
Sales Volume (Millions of USD)
Sales Volume (Millions of USD)
Other Europe
1,600
Argentina
200
600
Other Europe
Other S. America
500
Other N. America
Switzerland
400
Ukraine
China
300
Netherlands
Israel
200
Norway
Australia
100
United Kingdom
Germany
0
2007
2008
2009
2,000
2010
2011
2012
2013
2014
2015
Q1 2016
United Arab Emirates
Germany
0
2007
Spain
2008
2009
700
Cross-Border Sales by Asset Type
1,800
2010
2011
2012
2013
2014
2015
Q1 2016
2015
Q1 2016
Canada
Cross-Border Sales by Asset Type
600
1,600
Sales Volume (Millions of USD)
Sales Volume (Millions of USD)
Other Asia
Other Asia
1,800
1,400
1,200
1,000
800
600
400
200
0
2007
2008
2009
Office
20
Other Middle East
700
Other Middle East
2,000
Retail
2010
2011
2012
2013
Industrial
Apartment
Hotel
Senior Lvg
2014
2015
Q1 2016
Source: CBRE Research,
Real Capital Analytics,
Q1 2016.
500
400
300
200
100
0
2007
Development Site
FLORIDA: A DESTINATION FOR GLOBAL CAPITAL | CBRE FLORIDA RESEARCH
2008
2009
Office
© 2016 CBRE, Inc.
Retail
2010
2011
2012
2013
Industrial
Apartment
Hotel
Senior Lvg
2014
Source: CBRE Research,
Real Capital Analytics,
Q1 2016.
Development Site
21
Palm Beach County
Tampa
• Cross-border investment in Palm Beach County
real estate increased significantly in 2015 but not
enough to exceed the previous peak in 2007 when
foreign investment reached nearly $320 million.
• Germans have been the second-most active foreign
buyers in the Palm Beach market, having acquired
a number of shopping centers totaling nearly $330
million since 2007.
• Canadian buyers have been the most active in the
Palm Beach market since 2007, having invested
over $427 million, or 29% of the total foreign
capital investment in the market.
• Foreign buyers in Palm Beach County have
favored multifamily assets, having acquired over
$635 million worth of apartments since 2007
representing 39% of total cross-border capital flows
to the market.
• Cross-border capital flows into Tampa reached new
heights in 2015 when foreign investment was nearly
$540 million, the highest level recorded since 2007.
• Canadians have contributed 42% of the foreign
capital entering Tampa CRE markets since 2007,
with a total investment over $957 million. Canadian
investors have expressed a strong preference for
multifamily assets.
Cross-Border Sales by Geographic Origin of Capital
• Cross-border investment in retail properties has
represented 30% of foreign investment across all
property types since 2007.
Cross-Border Sales by Geographic Origin of Capital
350
600
Other Pacific
Other Middle East
300
Other Asia
Other Europe
250
Other S. America
Mexico
200
Brazil
Norway
150
Netherlands
Israel
100
United Kingdom
Sales Volume (Millions of USD)
Sales Volume (Millions of USD)
• Foreign investment in multifamily properties has
totaled nearly $730 million since 2007, accounting
for 32% of the total cross-border sales volume
across all property types.
Other Asia
500
Other Europe
Sweden
400
United Arab Emirates
United Kingdom
300
Israel
China
200
Singapore
Switzerland
100
Bahrain
50
Other Middle East
Netherlands
Switzerland
Australia
Germany
0
2007
2008
2009
350
2010
2011
2012
2013
2014
2015
Q1 2016
0
2007
Canada
2010
2011
2012
2013
2014
2015
Q1 2016
Canada
Cross-Border Sales by Asset Type
500
Sales Volume (Millions of USD)
Sales Volume (Millions of USD)
2009
600
Cross-Border Sales by Asset Type
300
250
200
150
100
50
0
2007
2008
Office
22
2008
2009
Retail
2010
Industrial
2011
Apartment
2012
Hotel
2013
Senior Lvg
2014
Development Site
2015
Q1 2016
Source: CBRE Research,
Real Capital Analytics,
Q1 2016.
FLORIDA: A DESTINATION FOR GLOBAL CAPITAL | CBRE FLORIDA RESEARCH
400
300
200
100
0
2007
2008
Office
© 2016 CBRE, Inc.
2009
2010
Retail
Industrial
2011
Apartment
2012
Hotel
2013
Senior Lvg
2014
2015
Q1 2016
Source: CBRE Research,
Real Capital Analytics,
Q1 2016.
Development Site
23
Orlando
Jacksonville
• Cross-border sales activity in 2015 reached $590
million, surpassing the previous high mark reached
in 2012.
• Since 2007, Canadians have invested $957 million
in Orlando real estate, mostly in multifamily and
retail assets. Canadians have accounted for 36% of
total foreign investment in Orlando’s commercial
real estate markets from 2007 through Q1 2016.
• The total cross-border investment in apartments
from 2007 to Q1 2016 was $836 million,
accounting for nearly 32% of foreign investment
across all property types.
• Foreign appetite for shopping centers returned in
2011 after a three-year hiatus with sales volume
totaling $58 million for the year and $213 million
from 2011 to 2015.
• Foreign investment exceeded $183 million in 2014,
the highest level yet in the current market cycle.
• Since 2007, Canada and Israel have been the most
active sources of foreign investment in Jacksonville’s
commercial real estate markets.
Cross-Border Sales by Geographic Origin of Capital
800
Other Middle East
Sales Volume (Millions of USD)
Other Europe
600
Other N. America
France
500
Bahrain
Argentina
400
Israel
300
Cayman Islands
China
200
200
Sales Volume (Millions of USD)
Other Asia
700
Germany
100
2009
2010
2011
2012
2013
2014
2015
Q1 2016
Canada
Germany
Netherlands
120
United Arab Emirates
100
Chile
80
Japan
60
Spain
Bahrain
Australia
Israel
2008
2009
2010
2011
2012
2013
2014
2015
Q1 2016
2015
Q1 2016
Canada
Cross-Border Sales by Asset Type
200
180
Sales Volume (Millions of USD)
Sales Volume (Millions of USD)
140
2007
700
600
500
400
300
200
100
0
2007
2008
2009
Office
24
Other Europe
0
Cross-Border Sales by Asset Type
800
Other Asia
160
20
Australia
0
Other Middle East
180
40
Brazil
2008
• Industrial and retail asset types each contributed
21% to the cross-border sales volume from 2007 to
Q1 2016.
• Canadians exhibit a preference for multifamily
and retail while Israeli buyers predominately seek
multifamily assets.
Cross-Border Sales by Geographic Origin of Capital
2007
• Multifamily transactions have accounted for 44% of
foreign investment across all property types since
2007.
2010
Retail
Industrial
2011
Apartment
2012
Hotel
2013
Senior Lvg
2014
2015
Q1 2016
Source: CBRE Research,
Real Capital Analytics,
Q1 2016.
160
140
120
100
80
60
40
20
0
2007
2009
Office
Development Site
FLORIDA: A DESTINATION FOR GLOBAL CAPITAL | CBRE FLORIDA RESEARCH
2008
© 2016 CBRE, Inc.
Retail
2010
Industrial
2011
Apartment
2012
2013
Hotel
Senior Lvg
2014
Development Site
Source: CBRE Research,
Real Capital Analytics,
Q1 2016.
25
2016 | CBRE FLORIDA RESEARCH
FLORIDA: A DESTINATION
FOR GLOBAL CAPITAL
FOR MORE INFORMATION ON CROSSBORDER CAPITAL IN FLORIDA PLEASE
CONTACT:
FOR MORE INFORMATION ON FLORIDA
LEASING AND INVESTMENT SERVICES,
PLEASE CONTACT:
AMERICAS RESEARCH
CBRE TRANSACTION AND ADVISORY SERVICES
QUINN EDDINS
Director of Research and Analysis
+1 305 428 6325
[email protected]
SOUTH FLORIDA
SHANNA DRWIEGA
Senior Research Analyst
+1 813 273 8433
[email protected]
To learn more about CBRE Research,
or to access additional research reports,
please visit the Global Research
Gateway at www.cbre.com/researchgateway.
MARY JO EATON
Global President
Asset Services/Valuation and Advisory Services
+1 305 428 6329
[email protected]
TAMPA
CHASE PATTILLO
Managing Director
+1 813 273 8420
[email protected]
ORLANDO
WILLIAM MOSS
Senior Managing Director
+1 407 839 3140
[email protected]
JACKSONVILLE/PANHANDLE
WILLIAM “TRIPP” GULLIFORD III
Managing Director
+1 904 630 6344
[email protected]
Disclaimer: Information contained herin, including projections, has been obtained from sources believed to
be reliable. While we do not doubt its accuracy we have not verified it and make no gurantee, warranty or
representation about it. It is your responsibility to confirm independently its accuracy and completeness. This
information is presented exclusively for use by CBRE clients and professionals and all rights to the material are
reserved and cannot be reproduced without prior written permission of CBRE.