U.S. Multifamily has not historically been a common investment vehicle for global commercial real estate investors, largely due to the differences in how residential real estate is conducted around the world. Despite this unfamiliarity, inbound capital to the U.S. multifamily sector has increased significantly in recent years, with total volume from 2014 to 2018 up by 241% over the previous five-year period.
Including assets acquired through entity-level deals, inbound capital to U.S. multifamily in 2018 reached nearly $14 billion. Since 2008, the share of global capital relative to total U.S. multifamily investment volume has nearly tripled, indicating a shift in attitude toward investment in this asset class.
Source: CBRE Research, Real Capital Analytics, March 2019.
U.S. Multifamily Inbound Investment Trends 2018
U.S. Multifamily Global Acquisition Volume by Region
Canada remains the largest source of inbound multifamily investment, benefiting from proximity and familiarity.
Note: % refers to each region's share of total cross-border multifamily volume for year indicated.
Source: CBRE Research, Real Capital Analytics, March 2019.
Top Sources of Global Capital to U.S. Multifamily, 2018
M&A activity drove more than half of all Canadian investment into U.S. multifamily in 2018—Brookfield's acquisition of Forest City included a portfolio of multifamily assets valued at $4.6 billion.
Source: CBRE Research, Real Capital Analytics, March 2019.
Shift in Multifamily Buyer Nationality
Since 2008, the share of global capital relative to total U.S. multifamily investment volume (global plus domestic volume) has nearly tripled.
Source: CBRE Research, Real Capital Analytics, March 2019.
Capital Flows by Buyer Type, 2018
Excluding entity-level acquisitions, which roughly doubled property company investment in 2018, acquisitions by investment managers and other institutional investors each represented nearly one-fifth of total global volume.
Note: Property company includes public and private developer, owner, operator and asset manager. Other institutional includes pension funds, insurance companies and sovereign wealth funds. Other includes banks, high net worth individuals and corporate users.
Source: CBRE Research, Real Capital Analytics, March 2019.
Global Capital Investment by Market Tier, 2018
55% of the total global capital invested in U.S. multifamily since 2014 went to secondary and tertiary markets. This is quite notable—particularly when compared to the office sector, where just 22% of global capital invested over the same period went outside primary markets—and speaks to the yield and rent growth opportunities available for multifamily assets in many non-gateway markets.
Note: Primary markets include New York City, Los Angeles, San Francisco, Chicago, Boston, Washington, D.C. and Seattle.
Source: CBRE Research, Real Capital Analytics, March 2019.
Global Capital into U.S. Multifamily
M&A activity drove more than half of all Canadian investment into U.S. multifamily in 2018—Brookfield's acquisition of Forest City included a portfolio of multifamily assets valued at $4.6 billion.
Note: San Francisco includes East Bay & San Jose; Los Angeles includes Orange County & Inland Empire; New York includes Stamford, No. New Jersey & Westchester.
Source: CBRE Research, Real Capital Analytics, March 2019.
Highest Growth Markets for Global Capital, 2018
Brookfield’s acquisition of Forest City significantly boosted multifamily volumes in Philadelphia and Cleveland, though both markets still had strong growth when excluding entity-level deals.
Source: CBRE Research, Real Capital Analytics, March 2019.
Buyer Preference for Portfolios vs. Individual Assets By Capital Source
Global investors are much more likely to buy portfolios than individual assets and tend to prefer mid- to hi-rise assets over garden properties. As a result, 60% of all global transactions in 2018 were valued above $200 million.
Note: Individual assets include assets acquired through entity-level deals.
Source: CBRE Research, Real Capital Analytics, March 2019.
Investment Characteristics by Capital Source
Source: CBRE Research, Real Capital Analytics, March 2019.
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