U.S. Is Top 12 Property Investment Pick

January 03, 2012 / Elizabeth Buckley, Commercial Property Analyst

Most individuals around the world who are interested in property investment favor the United States as an investment location. Some investors were lost to Brazil. According to the experts, the U.S. will maintain that top position throughout 2012.

U.S. Is Top 12 Property Investment Pick

Results of the 20th annual survey taken by AFIRE stated that the United States was the best and most secure place to invest in commercial real estate. That is not the only factor that will influence decisions. Increased rents along with the reversal of a foreign investments tax that was in effect since 1980 will weigh heavily on their decisions.

In 2011 investments were made mainly in Los Angeles, New York, Boston, Washington and San Francisco. Brazilian commercial property is now a more secure place to invest. Sao Paulo, the biggest city in Brazil, holds the distinction of being number four on the list of best cities to invest their money.

New York remained in the number one spot. London was second and Washington was third. Number four was Sao Paulo and number five San Francisco.

AFIRE experts expressed the opinion that there is zero chance of Brazil surpassing the U.S. in property investment. Of the $874 billion dollars that those surveyed hold, $338 of those billions are invested in the U.S.

One year ago 72 percent of those who responded planned on increasing investments in U.S. commercial real estate in 2011. That number fell to 60 percent for 2012. There were 64.7 percent who believed the U.S. offered the optimal investment opportunities for 2011. For 2012 that dropped to 42.2 percent.

Respondents would be more inclined to make property investments in the U.S. if rent and rental growth grew stronger. Another factor limiting those investments is a 1980 act, the Foreign Investment in Real Property Tax Act. It imposes excessive tax on foreign investors upon selling. They are exempt from this tax if the country they live in has a U.S. taxation treaty.

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