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America's real estate deemed safe for foreign investment

RICS sees great returns

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A recent press release points to U.S. real estate as particularly sound given the current overall uncertain climate globally.

And while the release is short on solid data, the talking points bear reading.

Take this quote as an example:

“Notwithstanding the geopolitical and monetary risks is many countries, the United States continues to attract capital as both a safe haven and one with superior returns to other global markets,” says James Kuhn, president of Newmark Grubb Knight Frank, one of the largest commercial real estate service firms in the world.

“With more than $80 billion invested in the U.S. in 2015, including 60% from China, Canada, Singapore Norway and the UAE, it has filled a hole in core and core-plus investments,” Kuhn said, “while those investors previously filling that space are looking in secondary markets or pulling back entirety as acceptable yields in the gateway cities are becoming problematic.”

This explanation is from the RICS press release and it’s pretty good:

With regular flows across borders (and oceans), controlling risk is also even more relevant and important now as real estate investment becomes increasingly global. Despite its uncertainties, real estate is seen as a relatively safe haven in the complex international investment world. Therefore, real estate investment decisions now affect many more people, with an increasing portion of retirement funds and large investment fund asset groups now looking to real estate for security. For example, TIAA, a trendsetter in this area, now fields a real estate division.

And former U.S. Treasury Secretary Lawrence Summers points out that the investment profession itself can take significant steps itself to reduce risk. 

“Real estate professionals who take the long view by warning their clients against buying at unsustainable highs or selling at unreasonable lows can help dampen the inevitable swings between optimism and pessimism that characterize all asset markets, including real estate,” he says.

RICS put out a press release to drum up interest for a coming event, the 2016 Summit of the Americas. Summers will be speaking there.

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