Foreign investors are increasingly buying more properties and land in the United States but the trend is not yet causing apprehensions among leaders of the real estate industry.
But realtor John W. Steffey of Baltimore warned that increasing foreign purchases of farms in the midwest might eventually pose a threat for "control of the destination of bit U.S. crops" in the world market. Steffey and other realtor panelists at a national realtor convention here this week said, however, that the biggest surge in general real estate investing is from U.S. pension funds seeking a yield of 8 or 9 percent annually and appreciation over the years.
Steffey said that investors from oil-rich and other foreign countries are making a purchases of office buildings, apartments and shopping centers if the project is completed and recommended by an American consultant. "They are still looking to buy but only taking a hard look at a completed project that offers a strong likelihood for appreciation. They are not so much interested in the current annual cash return," Steffey said.
The Baltimorean also told a press conference during a convention of the National Assoc. of Realtors that the Monumental Life Insurance Co., which is a parent firm for Monument Properties in Baltimore, plans to sell off $800 million worth of Eastern seaboard properties early next year because the "stock does not reflect the value of the firm's realty holdings."
The holdings which is originally put together by the Meyeroff family of Baltimore in Monument Properties, include 18,000 apartment units, 2 million square feet of office space and $7 million dollars worth of shopping centers. "It will be a significant sell-off of major properties near Baltimore an throughout the east," said Steffey, who said he has a personal brokerage interest in the transactions.
Although Steffey did not speculate that foreign investors might be interested in the package of properties to be offered by Monument Properties, they would fit into the category of completed properties. Steffey pointed out that foreign investors are not interested in putting together new deals.
Katsumi Ohama, a realtor in Hawaii, said that the state in the pacific estimates that $632 million is invested here in business and real estate by foreign interests and that 53 per cent of that amount is by Japanese investors. Canadians and Australians have interests of 13 and 14 percent respectively.
Ohama said that the total foreign investment in Hawaiin real estate is now only 2 percent, which is "far from any treat of a foreign takeover." He said Japanese investments in Hawaiian real estate are estimated at $335 million. However, individuals from Japan, Canada, Australia and the Far East are known to represent a significant part of the investment market in new Hawaiian condominum apartments.