Norway Tops List of Foreign Commercial Real Estate Buyers

Bnorwayloomberg.com recently posted an article stating that Norway, with its $870 billion sovereign-wealth fund, is at the top of the list of foreign U.S. commercial real estate buyers. According to research firm Real Capital Analytics Inc., the country is acquiring buildings across the globe, including the U.S., with a total of more than $3.2 billion spent so far in 2014. Just last year Norway spent less than half that amount for property purchases. Research firm Green Street Advisors claims that prices for top-quality buildings in major U.S. markets are currently being driven up by foreign funds because of the willingness to accept lower yields than domestic buyers.

Rick Rybeck is an attorney with a master’s degree in real estate and urban development. He has over 20 years of experience with the legislative and executive branches of state and local government. According to Rybeck, “We live in a global economy. The desire for profit is the same regardless of the nationality of the investor. Articles that focus on the nationality of investors in U.S. property create specious fears and exploit xenophobia while missing the important news.

“The important news is that real estate booms and busts helped create the Great Depression and every major recession or depression in our history. Unless we address the root cause of real estate speculation, we will repeat these episodes regardless of whether the speculators are foreign or domestic.

“Fortunately, there is a policy tool that has been successfully employed to promote affordable housing, job creation and more sustainable development while reducing land speculation and sprawl. This tool is a reform of the property tax whereby the tax rate on privately-created building values is reduced while the tax rate on publicly-created land values is increased.”

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