Not the Beattles: This time it's the Asian Invasion

Much like the Beattles and the British Invasion of the 1960’s a new foreign invasion, this time of the Asian variety, is about to take place....and it appears it may have just as big an impact in the U.S. culture in terms of the commercial real estate markets.
Rumblings at lunch. Last week I had lunch with a few prominent and stealth venture funds and land venture partnerships and it seems “Sovereign Wealth Fund” is the hot topic coming into the end of CY 2009 and first half of CY 2010. These guys I was talking to were striking deals with China (of course), Japan (2nd biggest holder of U.S. Treasuries), and India. I was happy to hear there is finally going to be some action in the market because of bid-ask gaps that are starting to narrow and foreign liquidity starts to infuse into the U.S. property markets. Are commercial property owners starting to throw in the towel because they realize the markets are too seized up, or are they being forced to do so as the financing bell tolls on their now troubled assets? Foreign investors are going to be a larger and larger part of this market going forward. Consider this from the Association of Foreign Investors:
“Two-thirds of foreign investors plan to buy some U.S. property before March 2010 according to a midyear survey of Association of Foreign Investors in Real Estate members. Equity investors planned to place seven times more equity and debt investors planned to place three times more debt, the survey reported. Foreign investors picked office as their top investment choice, replacing multifamily, and Washington, D.C., as their top U.S. location. While global investments in the U.S. were close to $15 billion in 2008, by midyear they were less than $5 billion.”
According to my fellow lunch partners the $15B number will be dramatically dwarfed when the acquisition plans start kicking in over the next two years. This means a lot of sidelined foreign cash is coming into the market. I introduced the venture firms I had lunch with to a platform that helps them intelligently plan their acquisition strategies and confidentially buy and sell troubled commercial assets. This platform is free to use and is a must-have tool if you are involved with disposition of distressed assets in a fiduciary capacity. I’m speaking of the RIISnet / Argus ADAPT platform. It’s well worth a look and I honestly feel that this is a transformative tool for the Commercial Real Estate business. Go HERE to check it out. If you want to see where the industry is headed it’s definitely worth a few minutes of your time. NEXT POST: Dating in the Dark for CRE