The Real Deal Miami

Latin American investors bullish on multifamily — and Cuba: report

Largest increase in Latin American real estate investment in the U.S. expected from Brazil

July 21, 2016 09:45AM
By Francisco Alvarado

  • Print

A Nasa photo of Earth with arrows showing Latin American investment in the U.S. and Cuba

An annual survey of top U.S. real estate executives predicts a new wave of Latin American investors pouring money into multifamily projects, with Brazil bouncing back to reclaim its title as a top generator of foreign capital. The Akerman U.S. Real Estate Sector Report also found that nearly a third of the 189 respondents are bullish about Cuba despite little to no change in the communist government’s ban on foreigners owning land there.

Overall, the report paints a very optimistic forecast in the flow of foreign investment for U.S. real estate projects despite a slowdown in Latin American buyers in South Florida, especially Brazilians and Venezuelans, whose countries are in political and economic free falls. In a prepared statement, Swire Properties President and survey participant Stephen Owens said the real estate industry was due for a market correction.

“Any time you have extended growth periods, ultimately there needs to be a reset, or a rebalance of supply and demand,” Owens said. “These moments in economic cycles are actually very strategic for us.”

According to the report, four in 10 survey respondents said that multifamily projects such as apartment buildings and senior living residential communities would account for 59 percent of the capital coming from Latin America. About 31 percent of the real estate executives said they anticipate the greatest increase in Latin American real estate investment in the United States will come from Brazil.

Pedro Freyre, international practice chairman for Akerman, the law firm that commissioned the report, told The Real Deal that real estate executives believe Brazil’s woes are short-term, which bodes well for the South Florida market. “Brazil is still the largest economy and largest market and biggest player in Latin America notwithstanding its current economic and political problems,” Freyre said.

Meanwhile, the U.S. government, developers and corporations are slowly making headway in Cuba, where the government has in recent years allowed joint ventures to manage Cuban-owned properties, Freyre said. Despite the substantial limitations to selling and buying land in Cuba due to its laws and the U.S. embargo, real estate developers see the island nation with the biggest potential for American investors.

“It’s surprising given the regime sanctions and extreme limitations that there is such a high level of interest,” Freyre said. “It’s the last frontier for significant development in the Caribbean.”