The days when real estate transactions were closed with a handshake between neighbors are disappearing. As commercial real estate activity creeps toward pre-recession levels, cross-border deals are also on the rise.
The internationalization of real estate deals began around 2000, but many investors retreated to more familiar turf when prices began to plummet. Now Jones Lang LaSalle reports that global commercial real estate transactions nearly doubled in the first half of 2010, driven by a return to pre-recession levels of cross-border transactions. Commercial real estate investment hit $132 billion in the first half of this year and 40 percent of that was deals done across national borders.
In Europe now, over half of transactions are cross-border. “Much inter-regional activity has targeted London and latterly Paris and we are currently witnessing increasing interest in Germany,” said Richard Bloxam, the head of Pan-Europe Middle East and Africa Capital Markets at JLL.
Over 35 percent of North American transactions were inter-regional, which should come as no surprise to investors eying the invasion of the New York market by California and Canadian pension funds.