Does foreign investment affect US office real estate prices?

McAllister, P. and Nanda, A. (2015) Does foreign investment affect US office real estate prices? Journal of Portfolio Management, 41 (6). pp. 38-47. ISSN 0095-4918 doi: 10.3905/jpm.2015.41.6.038

Abstract/Summary

his article examines the impact of foreign real estate investment on U.S. office market capitalization rates. The geographic unit of analysis is MSA and the time period is 2001–2013. Drawing upon a database of commercial real estate transactions, the authors model the determinants of market capitalization rates with a particular focus on the significance of the proportion of market transactions involving foreign investors. Employing several econometric techniques to analyze the data, the results suggest statistically significant effects of foreign investment across 38 U.S. metro areas. It is estimated that, all else equal, a 100 basis point increase in foreign share of total investment in a U.S. metropolitan office market causes about an 8 basis point decrease in the market cap rate.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/41539
Identification Number/DOI	10.3905/jpm.2015.41.6.038
Refereed	Yes
Divisions	Henley Business School > Real Estate and Planning
Publisher	Euromoney Institutional Investor Plc
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