More Commercial Agents Land International Business
June 28, 2018
Nearly one-fifth of REALTORS® in the commercial space say they closed a sale with an international client in 2017, and 35 percent say they have seen an uptick in the number of foreign clients in the past five years, according to the National Association of REALTORS®’ 2018 Commercial Real Estate International Business Trends report. Buyers from China and Mexico are generating the most demand, the report states.
“The profile of smaller commercial markets is continuing to rise as many foreign investors are attracted to smaller-sized properties in secondary and tertiary markets, bringing REALTORS® confidence that increased sales and leasing activity will continue to occur in 2018,” says Lawrence Yun, NAR’s chief economist. “Since 2016, world economies have regained their footing and have pressed toward higher ground. Global economic output increased in 2017, and commercial real estate continue to be a healthy investment for global investors.”
A majority of buyers purchased commercial space for rental property (39%) or business investment purposes (34%), according to the report.
The top countries of origin for foreign buyers are China (20%), Mexico (11%), Canada (8%), and the United Kingdom (6%).
The two states where foreigners purchased and sold the most commercial property last year were in Florida and Texas, according to the report. California followed as the third most popular buyer and seller destination.
The majority of foreign commercial buyer and seller transactions tend to be at the higher end of the market, the report notes. In 2017, the median international buyer-side transaction was $975,000, while a median seller-side transaction was $1 million.
Foreign buyers of commercial real estate tend to complete more cash transactions than those purchasing residential real estate. Seventy percent of international transactions were closed with cash, according to the report.
“REALTORS®’ international clients found U.S. commercial real estate markets to be a good value in 2017,” Yun says. “About seven in 10 respondents reported that international clients view U.S. prices to be about the same or less expensive than prices in their home country.”
Updated: July 18, 2018