I reviewed a new study of 90 global equity investors last week. The report by Prequin, a London group, indicates that institutional investors intend to commit more capital to private equity funds in 2010 than they did in 2009. The long term view is predominantly bullish and rather than chase emerging property markets in Asia and India they are likely to shift their interest to debt-burdened and distressed property.
Foreign investors, 51% of respondents, view the U.S. market as the best opportunity for real estate appreciation, according to the Association of Foreign Investors (AFIRE) in a report released January 18, 2010. One of the significant portions of the survey detailed that of the top 5 U.S. cities reflecting the best investment opportunities 3 are on the East coast; Washington D.C., New York, and Boston. Multi-family properties led as the preferred investment type followed by office, industrial, retail and hotel properties.
Now, here is the major impetus behind their expectations. The U.S. remains the country selected as the most stable and secure real estate environment. As a result, I anticipate that investments from other countries will help to stabilize U.S. interest rates, assist in keeping mortgage interest rates low, spur business expansion and enable consumers to become homeowners.
In short, the input of foreign funds will put downward pressure on long term rates, influence jobs creation, increase home sales activity and all this makes me very optimistic about the direction of property values in the Northeast corridor of the U.S. and the Lakes Region second home market in particular.