The U.S. has displaced Europe as the favorite place for Asian investment in foreign commercial real estate.
Cross-border property investment by Asians surged to $8.6 billion in the first quarter, the most active start to a year since institutions in the region began a major push into overseas real estate in 2013, CBRE Group Inc. said in a statement Friday. The U.S. captured $3.3 billion of the total, ahead of Europe's $2.5 billion.
Large cities such as New York have benefited from an influx of foreign cash that is pushing prices on top-tier buildings to records. Beijing-based Anbang Insurance Group Co. bought the landmark Waldorf Astoria in February for $1.95 billion, the largest deal ever for a U.S hotel. Office towers are fetching prices 33 percent above the peaks of 2008, according to an index from Moody's Investors Service and Real Capital Analytics Inc.
The appetite for properties on the West Coast, including office buildings in San Francisco, Seattle and Los Angeles, "has substantially increased in recent months" as Asian investors are drawn to the region's proximity and familiarity, according to Los Angeles-based CBRE.
Among recent West Coast purchases were Beijing-based Oceanwide Holdings Co.'s acquisition of the First and Mission development site in San Francisco, CBRE said.
While the economic recovery and low interest rates are drawing foreign capital to the U.S., Europe remains popular with Asian investors, CBRE said. Taiwanese insurers have been buying real estate in London, the world's top investment destination, and their Chinese counterparts have been focused on continental Europe, the brokerage said.