Commercial Investment Real Estate July/August 2018 | Page 50

CCIM
CONNECTIONS
by Sarah Hoban
Shahab Moreh
Global Opportunities
he U.S. is poised for a surge in international investment.
“I think in the next six months and even beyond, we
expect to see an increase in the flow of international
investors [who are] investing in U.S. real estate,” says
Shahab Moreh, partner at Mazars USA in New York. Moreh
leads Mazars’ real estate practice area.
“One of the big drivers of this trend is the Tax Cuts and Jobs
Act,” he says. “That, in a nutshell, is reducing corporate tax rates
in the United States, and foreign investors are going to receive the
benefit of reduction of corporate taxes.”
Moreh also points out that as international investors look to
diversify, “there’s a lot going on in politics around the world.
There’s instability in many regions, and [investors] still do view
the U.S. as a stable geographic area that they’ll continue to
invest in.”
Investment will come from Canada, and Korean and Euro-
pean — particularly German — pension funds, as well as some
Israeli pension funds, says Moreh. There’s been more scrutiny and
restriction on Chinese real estate investments in the U.S., he adds,
although Chinese capital that’s currently in the U.S. may move
between asset classes to maximize rates of return.
International investors are partial to gateway cities, he notes.
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Popular U.S. markets include New York, Chicago, and the West
Coast. Los Angeles is a favorite, but also Sacramento, Calif.;
San Diego; San Jose, Calif.; and even as far north as Seattle. He
also sees condominium development opportunities in the Miami
area, and Israeli bond investors doing transactions in areas such
as Baltimore and Texas.
What does this mean for commercial real estate professionals?
The most successful international partnerships, says Moreh, “are
the ones that understand the cultural differences and are able to
manage the relationship. Also, international investors are sensitive
to the deal structure and the tax consequences of their investment.
They’re looking for their joint-venture partners here to have a good
handle — and have the right advisors — to help in due diligence
of the portfolio, to advise properly on the tax structuring, and to
be able to assess the fair value of the investment opportunity.”
“There’s great opportunity in this space,” he adds. “There’s a
lot of flow of capital coming in, and those who will benefit are
those who have a focus on targeting international prospects and
are able to build relationships. And it is competitive, so they have
to be able to show their expertise and their value proposition.”
Sarah Hoban is a freelance writer in the Chicago area.
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