What is so special about real estate investment in USA?

News websites and online portals in Bahrain last week published news stories about real estate deals carried out by Bahraini investment institutions for purchasing properties in USA. Here, we take a closer look at those deals as well as offering an overview of the real estate investment in USA and why it is receiving growing interest.

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Investcorp

Investcorp was one of the institutions named in news last week due to its acquisition of US properties portfolio including 8 different assets scattered around Las Vegas, Denver, Chicago, Atlanta, and Dallas. The deal value hit about 400 million dollars. This acquisition rose the value of properties purchased by Investcorp in the last 12 months to one billion dollars.

The eight properties are already leased, they register high turnout rate all over the year. Maybe that’s why they looked tempting for Investcorp.

It’s worth noting that the cumulative value of assets owned by Investcorp in USA real estate sector is 1.4 billion dollars located around the most vital markets.

GFH Capital

GFH Capital, a subsidiary of GFH Group Bahrain, has announced joining the real estate investment in USA club by purchasing a properties portfolio including 18 different industrial properties scattered around 6 regions in USA.

98% of the purchased properties are leased securing an annual rents yield varying between 8% and 10%.

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Real estate market in USA

United States of America is a sub-continent as called; vast areas abound with central cities, industrial areas, and touristic traction points, teeming with robust economic activity stimulating the real estate market current.

There are plethora of attractive locations for real estate investment especially from GCC region like New York which is one of the top attracting real estate markets around the globe, Atlanta, the city witnessing robust building and construction activity on all scales, in addition to Miami where properties market is having an incredible run. Apartment prices in Miami range between 275 and 900 thousand dollars.

Miami secure annual return rate from 8% to 12%

The returns on real estate investment in USA vary as a matter of fact from a state to another and from city to another, however, it ranges in average between 8% and 12% which is a perfect rate.

The annual value of Khaliji real estate investment in USA is estimated to be 5 billion dollar. Khaliji real estate companies working in USA sell around 50 thousand properties units a year.

Why invest in US real estate?

So what makes real estate investment in USA so interesting? Why is it having high turnout from GCC investors?

Well USA has the main two factors leading to investment success in any line of business which are high yield and stability.

As we said the properties market in USA, especially in the major cities, secure an annual yield rate ranging from 8%-10%. Also USA as a whole is known for political stability and safety compared to other states around the world.

There are number of side factors also like high influx of Arabian and particularly Khaliji visitors in states having large Arab communities like Detroit, Michigan. Visitors go there for different reasons either entertainment, business, shopping or study.

Detroit has large Arab community

Many Khaliji youth travel to USA for studying; this helped simulating the real estate investment in USA as it encouraged many investors to invest in buy-to-let kind of properties especially in the areas having large Arabian students community. Rents yields in these areas could secure annual rate ranging from 5%-10%.

Besides high tourism rates, properties prices in USA are bit reasonable compared with other markets in Europe especially after the large hit which took place amid the international financial crisis 5 years ago. However, the market regained a lot of its previous zest nowadays and is bouncing back to its typical rates.

[For more about US real estate check: Get introduced to the American mortgages system]