As commercial real estate prices decline, wealthy investors are among the top buyers of available properties.
- Commercial real estate locations were among those most affected by the pandemic and the rise of remote work.
- Wealthy investors are taking advantage of the opportunity to buy up commercial properties. Zara founder Amancio Ortega, for example, acquired 10 properties in North America and the UK last year—more than a $2 billion investment.
- Institutional investors focused their attention on offices, rental housing, and logistics sites amid a growing number of defaults.
- In 2022, individuals, family offices, and closely held companies invested around $455 billion combined in commercial properties.
- For the first time, these groups were among the most active buyers in the sector, Bloomberg reports.
Why it’s news
Rising interest rates are still pushing down the lending volume, but the world’s richest—full of cash—are still looking to diversify their investments through various real estate buys. Ortega, for example, bought a luxury residential skyscraper in Seattle shortly after purchasing five U.S.-based logistics sites. The striking variety gives Ortega a more diverse portfolio.
Alibaba Group Holding co-founder Joe Tsai now has an indirect stake in multiple luxury hotels around Spain. He invested in these properties through Blue Pool Capital—his family office.
Private investors were primarily interested in rental housing investments last year. These investors mainly purchased U.S. properties. London had the most investments from foreign investors, but New York led the way with the highest amount spent by private investors on commercial properties, Bloomberg reports.