Foreign investors see turnaround a year from now

According to the results of a survey by the Association of Foreign Investors in Real Estate (AFIRE), foreign real estate investors say they expect to see a recovery in the U.S. real estate market by the end of the second quarter of 2010. Respondents projected their investments for the remainder of 2009 will substantially out-strip investments completed year-to-date. On the debt side, survey respondents say they expect to invest three times more than current investment levels year-to-date; equity investors expect they will place seven times more than current year-to-date investments. Overall, three quarters of the survey respondents had not yet invested in 2009; however, more than two-thirds of them plan to invest some debt or equity in U.S. real estate before the end of the year. Survey respondents continue to be optimistic in their investment projections. 31 % said they were more optimistic than at the beginning of the year; 16% said they were more pessimistic; and 53% said they felt about the same as at the beginning of the year. Twice as many respondents named Washington as their city of choice over second-place New York and third place San Francisco. Boston, which has not appeared among investors' top five cities since 2001, was selected as the fourth city and Los Angeles, fifth. Survey respondents also said that the office sector would recover first, followed by the multifamily and industrial sectors. This is a shift in investor perception from the results of 17th annual survey at the start of this year in which investors expressed an interest for multifamily over office buildings as the preferred property type for their real estate investment dollars.