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Foreign investors bank on Austin as No. 1 commercial real estate market in U.S.

Foreign investors bank on Austin as No. 1 real estate market in U.S.

Downtown Austin
Austin's market can expect more foreign investment.  Courtesy photo

Austin sits in the bull’s-eye for foreign real estate investors targeting the U.S.

In a recent survey released by AFIRE, an industry group for real estate investors, foreign real estate investors favored Austin over any other U.S. city for buying property in 2021. Boston ranked second, with Dallas in third place. Houston tied for No. 14, and San Antonio tied for No. 15.

This is the first time in the 30-year history of the AFIRE survey that a city as small population-wise as Austin has topped the list or even showed up in the top three. Twenty-three percent of those questioned in the survey put Austin in the No. 1 spot, and 33 percent ranked Austin first, second, or third.

Austin appeared at No. 10 on last year’s AFIRE list of the most favored U.S. markets for commercial real estate investment, while Dallas wound up at No. 7, Houston tied for No. 12, and San Antonio was unranked.

In this year’s survey, foreign real estate investors chose apartment buildings as their favorite property type, with warehouses landing at No. 2.

Mike McDonald, vice chairman of commercial real estate services company Cushman & Wakefield, recently told The New York Times that Austin is “the hottest market in the country right now.”

“Commercial transactions are likely to pick up in the second half of 2021 and in 2022 as more people get vaccinated, more businesses operate at higher capacity, personal leisure and business travel pick up, and consumer spending rises,” the National Association of Realtors noted in a first-quarter report about Austin’s commercial real estate market.

A number of recent developments are a testament to Austin’s rising-star status in commercial real estate:

  • A March list from the National Association of Realtors placed Austin among the top 10 U.S. markets for commercial real estate this year.
  • A recent survey by commercial real estate services giant CBRE identified Austin as the top U.S. metro area for investment prospects in 2021.
  • In March, commercial real estate investment platform CrowdStreet announced it was moving its headquarters from Portland, Oregon, to Austin. A majority of the properties sold through CrowdStreet are in Texas.
  • In January, data center owner and operator Digital Realty Trust said it was relocating its headquarters from San Francisco to Austin. The company owns more than 30 data centers in Texas.