When you invest in commercial real estate it’s important to think big, even globally! There are plenty of great opportunities for investment here at home, but if you remain focused only on the domestic market you could be missing out on huge returns abroad.
“There are many lucrative opportunities for commercial real estate investment around the globe, but borrowers aren’t sure where to turn for financial support – so many lenders don’t want to fund deals abroad,” said Kevin Wolfer, CEO of Kennedy Funding. “Guided by Kennedy Funding’s expertise and robust international lending infrastructure, our clients have been able to secure loans for investments around the world.”
The international commercial real estate market is booming, and we at Kennedy Funding continue to close more loans abroad each year. Here, we highlight five locations which have seen immense growth in recent years and are poised to continue expanding.
The homeland of reggae may seem like an unlikely place to include on a list of the hottest commercial real estate markets, but don’t sleep on it. While Jamaica has historically suffered slow economic growth, largely in part due to sluggish foreign capital investment, the national economy is young, vibrant, and ready to grow. Traditionally, it has been difficult to land a loan from a conventional lender for commercial real estate acquisitions and projects in Jamaica, but private lenders are free of the hesitation that plagues banks. Kennedy Funding has closed several loans in Jamaica.
Colombia’s economic growth continues to drive industrial and office space development in that South American country. Increased infrastructure, including a growing network of highways and a move to simplify the supply chain, has led to a 14 percent increase in warehouse space throughout the country. Residential real estate development has also seen significant growth, as the Colombian government commits to building hundreds of thousands of housing units aimed at lower and middle-class citizens.
For investors looking to purchase hotel and retail properties, Spain offers a fast-growing opportunity. While commercial real estate properties like offices are not a huge draw in Spain, the rise in tourism led to a record year for hotel and retail investment in 2017. The Spanish economy at large is doing well now, too. Through 2017, Spain maintained a year-over-year growth rate of 3 percent, which signals a healthy, stable economy. The improvement in the economic indicators of retail sales, employment, and GDP suggest that the Spanish economy is back on track after hitting a brief stumbling block when the Eurozone crisis heavily impacted the western European nation in 2012. Those days are gone, however, and the inflows of foreign capital from the U.S., U.K., and France shows that global investors are well aware of it too.
Germany is one of the hottest property markets in the world right now. In fact, four German cities cracked the top ten in terms of growth rate from the final quarter of 2016 through 2017. Topping the list was Berlin, which saw its property market grow in value by 20.5 percent in that time. With all that growth you might be wondering if you’ve missed your window, but fear not: Berlin’s commercial real estate values remain relatively affordable by European standards, offering plenty of opportunity to invest in the hottest property market in the world.
5. Reykjavik, Iceland
Reykjavik was the third-fastest growing city in terms of property values from the end of 2016 through 2017. Values grew by a hearty 16.6 percent during this time, but it’s not just the numbers that represent an opportunity for commercial real estate investors, it’s the reason why they’re rising. Iceland’s property values are experiencing the ebb and flow of supply and demand, with the latter currently outpacing the former significantly. Many Icelandic contractors went out of business during the 2008 financial crisis, and now there are simply not enough developed properties to go around. For foreign commercial real estate investors, this represents a huge opportunity to buy raw land, build, and profit.
6. Izmir, Turkey
The near East nation of Turkey boasts the second fastest growing city by property value. Izmir is a metropolitan city located on Turkey’s Aegean coast that experienced 18.5 percent growth in property values from the final quarter of 2016 through 2017. While the ongoing currency crisis facing the Turkish Lira raises some domestic economic concerns, it also provides an opportunity for foreign investors to buy low.
Your private lenders for international commercial real estate
When investing in commercial real estate internationally, you’ll need to partner with a lender that has experience closing deals worldwide. Kennedy Funding is one of the only U.S.-based direct private lenders willing to work with partners abroad, with the infrastructure necessary to follow the regulations and procedures that vary vastly from country to country. If you’re looking to expand your portfolio beyond American borders or double down on your existing foreign investments, Kennedy Funding is your ideal lending partner, with a successful track record to boot.