foreign investment in us/canada apartments · q2 2000 q4 2000 q2 2001 q4 2001 q2 2002 q4 2002 2003...
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Foreign Investment in US/Canada Apartments
April 2014
1
0%
5%
10%
15%
20%
25%
30%M
ar-
78
Mar-
80
Mar-
82
Mar-
84
Mar-
86
Mar-
88
Mar-
90
Mar-
92
Mar-
94
Mar-
96
Mar-
98
Mar-
00
Mar-
02
Mar-
04
Mar-
06
Mar-
08
Mar-
10
Mar-
12
Ap
art
me
nt %
of N
PI
Source: NCREIF, LaSalle Investment Management As of 4Q2013
US Apartment Share of NPI Has Risen Significantly Since 1990s
2
Canada: Apartments Only 7% of IPD Index Capital ValueREALpac / IPD Canada Quarterly Property Index, Q1/00 – Q4/13
Source: IPD, LaSalle Investment Management At
Q4 2013
0%
1%
2%
3%
4%
5%
6%
7%
8%
Q4 2
013
Q2
20
13
Q4
20
12
Q2
20
12
Q4
20
11
Q2
20
11
Q4
20
10
Q2
20
10
Q4
20
09
Q2
20
09
Q4
20
08
Q2
20
08
Q4
20
07
Q2
20
07
Q4
20
06
Q2
20
06
Q4
20
05
Q2
20
05
Q4
20
04
Q2
20
04
Q4 2
003
Q2 2
003
Q4
20
02
Q2
20
02
Q4
20
01
Q2
20
01
Q4
20
00
Q2
20
00
% o
f IP
D C
apital V
alu
e
Q4/13 IPD Index Capital Value: $117.6 bln
Apartments: $8.6 bln
3
10%
15%
20%
25%
30%
35%
40%
45%
50%M
ar-
78
Ma
r-8
0
Ma
r-8
2
Ma
r-8
4
Ma
r-8
6
Ma
r-8
8
Ma
r-9
0
Ma
r-9
2
Ma
r-9
4
Ma
r-9
6
Ma
r-9
8
Mar-
00
Ma
r-0
2
Ma
r-0
4
Ma
r-0
6
Ma
r-0
8
Ma
r-1
0
Ma
r-1
2
Se
cto
r %
of N
PI
Industrial Office Retail
Source: NCREIF, LaSalle Investment Management As of 4Q2013
US Industrial, Office Sectors Losing Share Since Early 2000s
4
0%
2%
4%
6%
8%
10%
12%
5-Year 10-Year 15-Year
An
nu
aliz
ed
To
tal R
etu
rn
All Propeties Apartment Industrial Office Retail
US Apartment Returns Above Average for Most Periods
4
Source: NCREIF, LaSalle Investment Management As of 4Q2013
5
0%
2%
4%
6%
8%
10%
12%
14%
5-Year 10-Year 14-Year
An
nu
aliz
ed
To
tal R
etu
rn
All Propeties Apartment Industrial Office Retail
Canada: Apartment Returns Lag but Are Less Volatile
5
Source: IPD, LaSalle Investment Management As of 4Q2013
6
0%
1%
2%
3%
4%
5%
6%
$0
$20
$40
$60
$80
$100
$120
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% C
ross
Bo
rde
r
Tra
nsacti
on
Vo
lum
e (
$B
il)
Domestic Investors
Cross-Border Investors
% Cross Border
Share of Foreign Investment in US Apartments Has RisenApartment Transaction Volume
6
Note: RCA data understates foreign investment because foreign capital managed by domestic managers is primarily classified as domestic capital
Source: Real Capital Analytics, LaSalle Investment Management As of 4Q2013
7
0%
5%
10%
15%
20%
25%
30%
35%
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
% o
f T
ran
sa
ctio
ns
$ m
illio
ns
Foreign Domestic % Foreign
Canada: Foreign Investors’ Share of Apartment Market Relatively
Small
7
Source: CBRE, LaSalle Investment Management As of 4Q2013
8
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Cro
ss
Bo
rde
r %
of
Tra
ns
ac
tio
ns
Apartment % Cross BorderOverall % Cross Border
Foreign Investors Prefer Other Property Types to Apartments, USForeign Buyers Buy Relatively More Offices, Hotels, Retail, and Warehouses
8
Note: RCA data understates foreign investment because foreign capital managed by domestic managers is primarily classified as domestic capital
Source: Real Capital Analytics, LaSalle Investment Management As of 4Q2013
Property Type
Cross Border Investment as
% of 2013 Transaction
Volume
Office 14.6%
Hotel 9.2%
Retail 7.8%
Industrial 5.6%
Apartment 4.6%
9
0
500
1000
1500
2000
2500
3000
3500
4000
Tra
nsa
ctio
n V
ou
me
($M
M) 2013
5-Year Average
Most Foreign Investment In Apartments Is from Canada
9
Note: RCA data understates foreign investment because foreign capital managed by domestic managers is primarily classified as domestic capital
Source: Real Capital Analytics, LaSalle Investment Management As of 4Q2013
10
0%
5%
10%
15%
20%
25%
30%M
ar-
78
Ma
r-8
0
Ma
r-8
2
Ma
r-8
4
Ma
r-8
6
Ma
r-8
8
Ma
r-9
0
Ma
r-9
2
Ma
r-9
4
Ma
r-9
6
Ma
r-9
8
Mar-
00
Ma
r-0
2
Ma
r-0
4
Ma
r-0
6
Ma
r-0
8
Ma
r-1
0
Ma
r-1
2
Ap
art
me
nt %
of N
PI
Garden
High Rise
Low Rise
Garden, High & Low Rise
High & Low Rise
All Apartments
Source: NCREIF, LaSalle Investment Management As of 4Q2013
US Increase Since 2000 is Mostly From High-Rise Apartments
11
US: Top 10 Foreign Apartment Purchases in 2013
11
Buyer Property Location UnitsPrice
(USD, mil.)
Brookfield (Canada) Southeast Portfolio Carolinas, VA, TX 3,115 $231.7
Land & Houses (Thailand) Domain Oakland, CA 264 $104.0
Grosvenor (UK) Northcreek Seattle, WA 524 $88.0
UBS (Switz.) Mission Grove Park Riverside, CA 432 $75.4
BVT (Germany)Estates at Southpark
MeadowsAustin, TX 670 $65.0
Morguard REIT (Canada) Grand Venetian Dallas, TX 514 $63.2
Milestone REIT (Canada) Nashboro Village Nashville, TN 994 $60.6
Morguard REIT (Canada) Portfolio Louisiana 588 $60.0
Investcorp (Bahrain) University Estates Austin, TX 498 $58.9
Morguard REIT (Canada) Lodge at Crossroads Raleigh, NC 432 $57.1
Note: RCA data understates foreign investment because foreign capital managed by domestic managers is primarily classified as domestic capital
Source: Real Capital Analytics, LaSalle Investment Management
This information is intended to assist professional investors in deciding whether they wish to consider the investment further. This publication does not constitute an offer to sell, or the
solicitation of an offer to buy, any securities or any interests in investment funds sponsored by, or the advisory services of, LaSalle Investment Management and is subject to
correction, completion and amendment without notice. Any such offer, if made, will only be made by means of a confidential prospectus. The prospectus will include information
regarding investment risk and investors should have the financial ability and willingness to accept these risks. All information obtained from third party sources is believed to be reliable
and current, but accuracy cannot be guaranteed and we do not undertake to update any information contained in this document. All assumptions, figures and calculations contained in
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LaSalle Investment Management Research
For more information please contact Bill Maher (410.878.4822)
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