Houston real estate more attractive to global investors

Posted on January 6, 2014 | By 
Principal Real Estate Investors 2000 St. James Place in the Galleria area on behalf of a consortium of South Korean investors. (Katherine Feser / Houston Chronicle photo)

2000 St. James Place in the Galleria area was purchased by Principal Real Estate investors for a consortium of South Korean investors about a year ago. (Katherine Feser / Houston Chronicle photo)

Houston moved up in rankings of both U.S. and global cities where foreign investors want to put their commercial real estate dollars, a trade group reported.

Among global cities, Houston moved up one notch to No. 4 in The Association of Foreign Investors in Real Estate’s annual survey of members. The Bayou City ranked behind London, New York and San Francisco.

Among U.S. cities, Houston took the third place in 2014 survey. Houston swapped places with Washington, D.C., which fell to No. 4 this year.

“Institutional investors see Houston as a gateway market along with New York, Los Angeles, Boston and Washington,” Greg Leisch, CEO of Delta Associates, said at Transwestern’s annual Trendlines presentation on Houston real estate trends in November.

“Houston office assets remain a bargain compared to gateway markets, potentially allowing for further price appreciation in 2014,” according to the Trendlines 2013 report.

The survey was conducted in the fourth quarter of 2013 by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business, for AFIRE. The group consists of nearly 200 members representing 21 countries.

Top global cities

  1. London (#2 last year)
  2. New York (#1 last year)
  3. San Francisco (#3 last year)
  4. Houston (#5 last year)
  5. Los Angeles (#14 last year)

Top U.S. Cities

  1. New York (#1 last year)
  2. San Francisco (#2 last year)
  3. Houston (#4 last year)
  4. Washington, D.C. (#3 last year)
  5. Los Angeles (#6 last year)

Most stable and secure countries for foreign investment

  1. United States (#1 last year)
  2. Germany (#3 last year)
  3. United Kingdom (#5 last year)
  4. Canada (#2 last year)
  5. Australia tied with Mexico (last year, Australia, Mexico and Indonesia tied for #5

Top five U.S. property types

  1. Industrial (#2 last year)
  2. Office (#4 last year)
  3. Retail (#3 last year)
  4. Multifamily (#1 last year)
  5. Hotel (#5 last year)

Source: The Association of Foreign Investors in Real Estate. Copyright Houston Chronicle All Rights Reserved.