Tuesday, December 14, 2010

International Monies Making A Difference

Two trends occurring (its all cyclical you know...).

One -- Domestic money is staying closer to home these days. Investors who have been putting capital into boom opportunities around the globe are keeping their seed money in the U.S. or the region these days.

Two -- International monies are once again making their way to the U.S., as overseas investors worried about world events, politics, trends or what have you, are sensing more stability -- and bargains -- on U.S. soil.

In fact, regarding the latter, only the U.S. and the United Kingdom are currently experiencing an increase in investments from overseas investors. The rest of the world is seeing a drop in foreign capital coming to their shores.

Says Kamil Homsi, president of Global Realty Capital, "the world has become more regionalized due to the uncertainty and the unstable indicators such as employment and consumer confidence." Homsi, whose company has offices in New York and Dubai, told Commercial Investment magazine in its November/December 2010 edition that the global recession has prompted investors to be more cautious about not only the types of properties they are buying, but also where those properties are located.

And commercial/investment properties in the United States, with its one-two punch of battered prices, and a stable government with no civil unrest (generally, but thats a post for another day), are prime targets for international international investors looking for what they consider to be safer havens for their monies.

Large portfolios are being split into chunks that appeal to a wider range of investors.

Here is another trend -- The capital constraints that still exist in the investment market are generating more business for some international brokers. REITs and other money brokers are getting more calls, and uncorking a lot of unused capital that has been sitting waiting for some of the dust to clear.

The best news? International investors who banked in years past on exhorbitant appreciation (many expected to double their money in only a couple years) have scaled back their expectations. They are buying smart these days, and conducting extensive forensic accounting on any project they look at. I can't blame them. A lot of people lost big because they jumped into huge projects on a wing and a prayer.

But wings and prayers don't add to the bottom line. And as notes, they can't be sold for they have no value. The value proposition needs to be clear. If it is, international money will make a move.

Which is good news for the marketplace here.

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