May 6, 2015

Originally published in Business Vancouver

“The press picks up on the Chinese story, but actually the Canadians remain, in office, the largest investor”
Lucy Fletcher, Director, JLL’s International Capital Group

While the rise of the U.S. dollar has some residential investors, not to mention cash-strapped snowbirds, mulling the sale of their U.S. properties and repatriating capital, commercial investors remain bullish on U.S. properties.

A forthcoming Jones Lang LaSalle report on global capital flows is set to underscore the leading role investors from Canada are playing in U.S. deals. The first quarter alone saw a fivefold increase in aggregate deal values from the same quarter a year ago, with US$3.6 billion worth of trades.

Office deals led the way with Ivanhoé Cambridge’s US$2.2 billion purchase of 1095 Sixth Avenue in Manhattan and, a few blocks away, Bentall Kennedy’s US$360 million purchase of 757 Third Avenue, as well as Canada Pension Plan Investment Board’s acquisition of 1455 Market Street in San Francisco and a host of lesser deals by Vancouver investors Pure Industrial Real Estate Investment Trust and Nicola Crosby Real Estate.

“The press picks up on the Chinese story, but actually the Canadians remain, in office, the largest investor,” said Lucy Fletcher, the Vancouver-based director of Jones Lang LaSalle’s international capital group. “The strength of the U.S. dollar hasn’t slowed down the pace of acquisition of real estate in the U.S.”

Whatever residential investors feel, commercial investors see steady strengthening for their properties.

“The strong U.S. dollar has resulted in a number of high-net-worth investors lowering their interest in additional U.S. real estate,” said Jamie Farrar, CEO of City Office REIT in Vancouver. “However, this has been less common with institutional investors who are looking for higher long-term return potential than is available in Canada.”

It’s a view Fletcher shares.

Read the full article in Business Vancouver


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