INSIDE COMMERCIAL REAL ESTATE

INSIDE COMMERCIAL REAL ESTATE
Foreign capital increases in Chicago
Non-U.S. investors' commercial deals rose 80.4% last year

SUSAN DIESENHOUSE
Published March 14, 2007

As the value and volume of commercial real estate transactions rose worldwide last year, the flow of foreign capital into the Chicago property market jumped 80.4 percent, to $2.1 billion, according to a Jones Lang LaSalle report released this week.

Overall, the city had $16.2 billion in transactions, 30 percent more than in 2005, the Global Capital Report said.

The most popular U.S. location among foreign investors, however, was Manhattan, whose total of $37.3 billion in transactions last year included $14.8 billion in deals involving foreign investors. That's up from $4.5 billion in foreign capital in 2005. Foreign investment in Boston also rose sharply, to $4.9 billion, a fivefold increase from 2005.

The nationality of foreign investors in the U.S. also shifted last year.

Those from Australia, Germany and Hong Kong reduced purchasing and were more active sellers, while those who are part of global funds or from Canada and the Mideast bought more property.

Foreign investors favored Germany and Europe more than the United States.

In Europe last year, they invested $305 billion, compared with $283 billion in the U.S.

Worldwide, overall real estate investment rose to $682 billion, a 38 percent increase from 2005 and almost double the $354 billion spent in 2003.
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sdiesenhouse@tribune.com