By J. Craig Anderson for The Arizona Republic
For the first time, metro Phoenix was among the top 10 U.S. markets in terms of foreign investment in commercial-real-estate assets in the second quarter.
Local real-estate analysts said a number of factors contributed to the boost in foreign investment in Phoenix, including a dearth of attractive, available commercial properties in coastal U.S. cities and the stabilizing of Phoenix-area real-estate prices.
While Canadians have dominated the Phoenix area’s offshore commercial-real-estate investment activity in recent years, there also have been purchases by European, Middle Eastern and Asian investors, analysts said.
In the second quarter, foreign investment in Phoenix-area commercial-real-estate totaled about $317 million, according to a report issued in late July by Jones Lang LaSalle Capital Markets Research.
New York topped the list with just over $1 billion in offshore real-estate investment in the second quarter, the report said, followed by San Francisco, with foreign real-estate investment totaling roughly $685 million.
Two large office purchases by a Canadian real-estate investment trust, or REIT, contributed significantly to Phoenix’s placing on the top-10 list in the second quarter, Desmond said.
Artis REIT, Winnipeg, Manitoba, purchased north Scottsdale multitenant office building MAX at Kierland, 16220 N. Scottsdale Road, for $79 million and the GSA Phoenix Professional Office Building, 21711 N. Seventh St., in Phoenix, for $75 million, both in the second quarter.
Those two purchases totaled $154 million, nearly half the Phoenix area’s total for offshore commercial-real-estate investment in the second quarter.
In all, there have been 11 commercial-real-estate purchases of at least $10 million in metro Phoenix by foreign investors since January 2010, Desmond said.
Beyond the general appeal of U.S. real estate, metro Phoenix is considered an attractive place to invest because it’s a growth market with relatively new structures, he said.
Local offices of commercial-real-estate brokerages already have benefited from the foreign investments, including the Phoenix office of CBRE, which is the designated leasing agent for MAX at Kierland.
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