Financial $afe haven: who are the wealthy foreigners investing in the United States?

• Author: Sutherland, Spencer

New York. Boston. Chicago. Salt Lake? The United States' largest cities have long been attractive targets for foreign investors looking to put their money into commercial real estate. Now, as more and more foreign investors flood into the market, they're looking beyond the big cities and into up-and-coming markets.

Whether it's an office building, a hotel or a skyscraper, demand for U.S. property is booming, thanks to six years of low interest rates as and the desire of foreign investors--especially those from countries with volatile economies--to find a safe place for their cash.

According to research firm Real Capital Analytics, foreign acquisitions of U.S. properties added up to $39.6 billion in 2014. That's nearing the peak of $46.5 billion in foreign capital that entered the United States in 2007 at the top of the real estate market.

Though it can be difficult to get a read on the volume of foreign capital pouring into the states, global consulting firm Deloitte estimates that foreign capital has recently grown from 8 percent to about 11 percent of the total real estate investment activity in the United States.

FUELING THE FIRE

In September 2015, many Utahns were taken by surprise at the announcement that a Chinese firm would be purchasing the Miller Motorsports Park, a racing facility that boasts a 23-turn, 4.486 mile road circuit course; a kart track; and a 24-acre paddock with garages, a club house and a museum. The Miller Motorsports Park was built by the Larry H. Miller Group of Companies, a privately held, Utah-based company (subject to judicial review).

The company had elected not to renew its land lease with Tooele County, and the county put the facility up for sale. Local media outlets covered the bidding process closely, and the county received multiple proposals from regional development firms. So the news that a Chinese firm had agreed to pay $20 million for the facility seemed to come out of the blue.

But it shouldn't have been such a surprise.

"Foreign investment in U.S. commercial real estate has been growing

for the past six years, and it is expected to increase even further," says Adam Gatto, senior vice president of investment properties at CBC Advisors.

There are several reasons for this demand, including the perception that the United States is a stable, safe place to invest. "The U.S. commercial real estate market has been attractive for a long time because of its liquidity, and it's been considered a safe haven for long-term investments," Gatto says, especially compared to more volatile options such as China and the Middle East or slow-growing countries in Europe.

According to Real Capital Analytics, the United States provides by far the best opportunity for capital appreciation globally, by a 26 percent margin...