Canadian investors are turning their eyes south of the border their neighbours for investment opportunities and are finding a lot of them. Sales are poised to reach record levels in 2014 as soon as the country’s second-largest pension fund closes on its $2.25 billion purchase of a Manhattan property, according to data provided by property research firms.
Pension funds and developers have been increasing their investment in foreign real estate this year. The United States has been a favoured location to the domestic market.
The agreement reached between Ivanhoe Cambridge, the real estate division of Quebec-based Caisse de depot et placement, and Callahan Capital Properties out of Chicago, to purchase building located at 1095 Avenue of the Americas in Manhattan from Blackstone Group has not yet been completed. Caisse de depot et placement manages public and private sector pension and insurance funds in Quebec. A final announcement regarding the 42-storey building may take weeks.
Once the Ivanhoe deal is completed, it will be the second-highest purchase price for an office tower in the United States since the General Motors building in New York was sold for $2.8 billion in 20008.
Canadians have already bought more than $8 billion in US real estate during the first nine months of 2014. During the same period of 2013, $7.8 billion was spent, according to Jones Lang LaSalle (JLL) and Real Capital Analytics. During all of 2013, Canadians spent a total of $11.86 billion on commercial property in the United States and they will likely surpass that mark this year.
The Canadian market is being held quite tightly by pension funds, according to Lucy Fletcher, vice president, international capital group and capital markets at JLL. There are very few assets available in the current market.
For the past four years, Canadian investors have been one of the largest buyers of US commercial properties. They have purchased 1,530 properties worth a total of $43.4 billion during that time, which is four times as much as China – the country in second place.
Previous Post
Early Full House For Modwen’s Rugby Retail Park
