While foreign investment in New York City residential real estate has captured the headlines, Massey Knakal Realty Services Chairman Robert Knakal appeared on CNBC’s “Street Signs” this afternoon to say foreign investors have also sought commercial properties (see video above). He reported seeing twice as much foreign investment in real estate thus far in 2012 as he did during the same period last year.
Knakal said most of the money was coming from nations that also rank among the United States’ top trading partners, led by Canada and Mexico. The investment comes in the form of both purchases and equity financing to established real estate players.
Like the residential buyers, commercial investors are making their investments completely in cash despite the record low mortgage rates. Knakal attributed the trend to global financial uncertainty and said foreigners most covet the highest-quality properties.
“They are loking at buildings in New York City as safety deposit boxes,” he said. The buildings provide an average annual return of about 4 percent to 6 percent, according to Knakal.