Dive Brief:
- Foreign investors have purchased more than $4 billion of commercial real estate properties in Seattle since 2015, with buyers from China and other Asian countries representing the biggest share of those deals, the Seattle Times reported.
- This tripling of the the typical pace of foreign investment includes purchase deals on warehouses, office buildings and condominium and apartment complexes, all of which represent a deviation from previous international focus on the city's residential market.
- Foreign investors told the Times that the one of their primary motivations for investing in Seattle real estate is that it's more affordable than the traditional North American target cities like New York, San Francisco, Los Angeles and Vancouver. Local officials also pointed to the presence of high-profile companies — Amazon, Starbucks, Microsoft — making the region well known in international investment circles.
Dive Insight:
Earlier this year, the the Downtown Seattle Association reported that the city had 65 major projects and a total $3.5 billion worth of construction underway — approximately two-thirds residential — beating its former record of 50 in 2014 and setting a new record since tracking began in 2005. And in May, Facebook unveiled its Frank Gehry-designed Pacific Northwest engineering headquarters, calling Seattle a "huge part" of the company’s future.
New construction is often an attractive option for many foreign investors because the EB-5 visa program permits foreigners to obtain U.S. residency in exchange for a significant investment in a qualified project. Chicago's Vista Tower could bring in about $200 million in investments using the EB-5 program, and New York City's Hudson Yards development also used this method as part of a $5 billion financing package last year.
According to the Times, the growth in foreign enthusiasm for Seattle has started to stabilize, but city officials expect interest in the city's real estate market to continue long-term.
