Commercial property

5 points to consider for a prospective international commercial real estate investor


According to the National Association of Realtors report 2017 Profile of International Activity in U.S. Residential Real Estate  “Foreign buyers purchased $153 billion of U.S. residential property in April 2016—March 2017, an increase from the $102.6 billion of property purchased in the previous 12-month period. This accounts for 10 percent of the dollar volume of existing home sales. Non-resident foreign buyers purchased $78.1 billion of property, while resident foreign buyers purchased $74.9 billion of property.”

Property in the US has long been considered a relatively safe place to invest for many foreign investors and while many opt for residential properties such as vacation or holiday homes, others are looking for purely commercial investments and this is an area that an international real estate investor needs to do some homework to understand some basic terms and how different types of investment properties potentially fit with their goals.

Some options to consider are the type of property, whether a shopping center, raw land, gas stations, office buildings, etc and this will likely be affected by both the goals of the investor along with market drivers in the geographic area under consideration.

Types of leases are an additional factor and may include a NNN or triple net lease where the tenant pays for the ongoing taxes, insurance, and management fees thereby giving the investor a rather ‘hands off’ investment for an absentee owner. Other considerations will be single or multi-tenant leases.

Finding a commercial real estate broker who specializes in the city in which you are looking along with one who specializes in the type of commercial property that you are looking for is extremely important and should be the first step after familiarizing yourself with the terms above.

The commercial broker will then make introductions to other professionals that an international investor might need such as a tax attorney, real estate attorney, CPA, banker, etc.

The process can be quite straight-forward with the right professional team and certainly should not be intimidating to anyone considering such investment.

5 points to consider for a prospective international commercial real estate investor

  1. Identify your budget whether $500,000 or $5,000,000 – this is the basis of what type of projects that you will be reviewing
  2. Are you looking for a short or long term investment
  3. Interview for a licensed commercial real estate broker who has specialization in the area of interest, both geographically and by type of property
  4. Ask for referrals to local professionals such as attorneys, and accountants to review how best to take ownership of potential investments be it an off shore company, an LLC, or other possibilities that will assist with tax structuring.
  5. Take the time to ask the questions until you feel comfortable

To learn more about Triple Net Leases  and multi-tenant leases watch our short video with Florida Commercial Broker Jim Sanders and a discussion of tips for taking ownership of commercial property with Attorney Jackie Bozzuto

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