International Investment in Washington DC
What You Should Know About Washington DC Real Estate Investments
Living in the nation’s capital means living in one of the top international real estate markets. International investors from countries like Korea, China, and Saudi Arabia are vying for the next big commercial real estate investment. This situation has been driving prices and returns higher and higher each year since 2011. 2015 is poised to be another banner year for Washington DC’s international real estate investor interest. So why is Washington DC so appealing to foreign investors and who are these foreign investors?
- Washington D.C. is home to 176 embassies making it an entry point for foreign interest to not only capitalize on commercial real estate investment returns but also to take up residency. High-end downtown condos and Georgetown single family homes have increasingly come under foreign ownership. Foreign investors seek to take advantage of Washington D.C.’s real estate market strength while gaining access to some of the best global banking networks and far-reaching nonprofits.
- Foreign investors are also attracted to Washington D.C.’s small businesses. With 2015 international focus on tech related start-ups and established real estate firms, D.C.’s economic development is thriving. The D.C. business and development authorities are catering to this international investment demand by forming strategic partnerships with China and Middle Eastern sovereign wealth funds.
- International investors favor established real estate investments. Not only are foreign investors taking part in new construction, they are also seeking fully leased spaces that turn consistent profits. Downtown office buildings are especially appealing whether new construction or existing properties.
Washington DC Has Had a 200% Increase in Commercial Transactions
While Washington D.C. has always been a melting pot of cultures given its geopolitical reach, this renewed international real estate demand creates interesting contrasts between downtown Washington D.C. and the suburbs. While the downtown commercial real estate deals are turning the highest profits ever, D.C. suburb returns remain stagnant with high vacancy rates. The overall effect of this shift has pushed average commercial transactions up over 200% in the last decade while suburban vacancy rates have increased by 10%. Real estate insiders are hopeful that the trickle-down economics of large sums of money from foreign investors will make Washington D.C.’s real estate market more and more attractive overall.
Too Many Global Dollars Are Chasing Too Few Appealing Opportunities Worldwide
From Asia to the Middle East, depressed D.C. commercial and residential real estate prices offer excellent chances for big returns. While foreign investment is not at the same level it was before the economic down turn of 2008, international investors continue to be enticed by real estate for its higher yield versus perceived lower risk. There are many theories on why foreign dollars are being injected into the Washington D.C. real estate market, but one thing remains certain after The Great Recession – there are too many global dollars chasing too few appealing international investment opportunities.