Foreign investors looking for a good return and a safe investment have turned to U.S. real estate in recent months. Beijing’s Anbang Insurance Group bought the Waldorf-Astoria hotel in New York City for nearly $2 billion in early February 2015, and other Asian buyers have spent hundreds of millions of dollars in New York alone since 2013. Canadian investors have also poured money into U.S. real estate assets, and sovereign wealth funds have been spending billions.
The reason for this uptick in foreign investment may be that the U.S. is perceived as much more stable than other countries. The Anbang deal was described by one real estate professional as removing money from the Chinese environment and “burying” it in the U.S. While the surge in demand has led to increasing real estate prices and lower returns, investors searching for a safe bet are looking around the world at their options and deciding they would rather take those predictable returns in the U.S. than risk their money chasing deals in less stable places.