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Texas a Draw for Foreign Real Estate Investors

Property in the Lone Star State is a hot commodity, and that’s not likely to change anytime soon. Here are three reasons why. U.S. real estate—and Texas real estate in particular—is becoming a hot commodity for foreign investors. This trend has been ...

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U.Sreal estate—and Texas real estate in particular—is becoming a hot commodity for foreign investorsThis trend has been picking up steam for the last few years and shows no signs of stopping. Foreign buyers purchased $5.1 billion in apartment communities through June of 2016—a record high; over the previous decade, foreign investors averaged $5.4 billion in multifamily annuallyAnd in 2015 international buyers invested $19.6 billion in apartment properties, taking a 12.8 percent share of the total $133.5 billion in apartment properties bought and sold that yearMuch of the money is coming out of China, though Canada and Mexico are key players as well. Casoro Capital CEO Yuen Yung said his private equity firm has seen “billions of dollars moving [from China] every year.” He went on to add that “a lot of that money has been coming through gateway cities, such as Los Angeles and San Francisco, but they are starting to look at secondary markets, like Dallas.” Speakers at the InterFace Multifamily Texas conference in October of 2016 also noted the influx of foreign investors to the Texas marketPanelist Brian O’Boyle, senior vice chairman with ARA, said that foreign capital was the second largest group of buyers of multifamily assets in Texas, with investment groups from Hong Kong, Bahrain, and Germany all seeking to invest in multifamily assets in Texas in 2016. Here are three reasons The Lone Star State is attractive to foreign investors. Strong Economic Growth in the Lone Star State Texas enjoys the second largest economy in the nation and a GDP of $1.587 billionThe state also ranks first for economic climate, and had the second fastest economic growth and third fasted job growth in the nation over the past five yearsA full 109 of the 1,000 largest public and private companies in the United States call Texas home—including AT&T, ExxonMobil and Dell. Texas is booming, and foreign investors have taken notice. Pro-Business Politics Drives Demand for More Housing Texas has a history of being an extremely pro-business part of the countryWith no corporate income tax and no individual income tax, it boasts one of the lowest tax burdens in the countryIt has also invested heavily in attracting large companies to the stateThe Texas Enterprise Fund (TEF), established in 2003, has invested approximately $500 million to close deals bringing major corporations as well as small businesses and investment capital to the state. Consistently Positive Job Growth Its pro-business stance has had the exciting side effect of driving job growth through the roof. According to research released December 2016 by Greater Houston Partnership, from 2010 to 2014 Houston alone added nearly half a million jobs, and the city continued to post 12-month net job gains throughout 2015 and 2016The overall state of Texas added more jobs in January 2017 than it had in any month since 2013, and those other months weren’t slow months. Where businesses go, jobs go—as do the employees required to fill those jobsThose employees all need a place to live, which ultimately promotes a robust real estate market. Still in the Early Stages—More Texas Deals with Foreign Investors Are on the Horizon The combination of factors at play that position Texas as an especially enticing market for foreign real estate investors aren’t just in motion—they’re making movesWe at The PPA Group have experienced the upswing firsthandThe multifamily real estate investment company acquired a Houston property in partnership with an Israeli investor as recently as April 2017. It’s highly likely that we will continue to see international investors direct large amounts of capital toward Texas real estate ventures in the near future and for years to come. John ALatham is CIO of The PPA Group, a private equity firm which creates discretionary funds for investing in multifamily properties and developmentsPrior to joining The PPA Group, Latham served as a principal with Steelwood Property Company, where he led multifamily acquisition and development activitiesLatham has also worked as an investment banker with Banc of America Securities—executing over $3.4 billion in equity and debt financing for the firm’s clients—and has provided his services in a consultant capacity to several real estate investment and private equity companies across the United States   Related Posts Betting on Service 19 May 2017 18:32 Betting on Service 19 May 2017 18:30 Economy Watch: Leading Economic Indicators Hint at Late-Year Growth 19 May 2017 14:59 Waypoint Campus Housing Acquires $102M Portfolio 19 May 2017 14:39 3 Things to Remember When Renting to Families 17 May 2017 19:40 Top Stories Historic DC Patterson Mansion’s Makeover Now Complete 19 May 2017 18:11 JV Taps HFF to Market Luxury Philadelphia Tower 19 May 2017 15:37 Security Properties Buys $26M Community in Seattle 19 May 2017 15:23 Economy Watch: Leading Economic Indicators Hint at Late-Year … 19 May 2017 14:59 Waypoint Campus Housing Acquires $102M Portfolio 19 May 2017 14:39 More Top Stories About Us Contact Advertising Editorial Guidelines Industry Links Archive Tags Subscribe to MHN News by City Albuquerque Atlanta Austin Baltimore Baton Rouge Boston Charleston Charlotte Chicago Cincinnati Cleveland Columbia Columbus Dallas Denver Detroit Durham Hampton Roads Honolulu Houston Indianapolis Jacksonville Kansas City Las Vegas Los Angeles Memphis Miami Milwaukee Minneapolis Nashville New Orleans New York Oklahoma City Orlando Philadelphia Phoenix Pittsburgh Portland Providence Raleigh Richmond Salt Lake City San Antonio San Diego San Francisco Seattle StLouis Tampa Tucson Tulsa Washington DC Connect with MHN Facebook Twitter Google+ LinkedIn YouTube Pinterest Yardi Companies and Affiliates Point2 Point2 Homes PropertyShark YES Energy Management MCEnergy Yardi Matrix Yardi Marketplace Commercial Property Executive Optimus RENTCafé Digital Editions Magazine Archive

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