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US Private Equity Real Estate Trends 2016

Pre - Election.

1) Doors Opening For Foreign Cash Proposed reforms in the Foreign Investment in Real Property Tax Act (FIRPTA) will allow foreign pension funds to invest twice as much in REITs, from 5% to 10%. The changes would further open the floodgates for foreign cash in real estate—an industry already buoyed by foreign funds. In after Brexit market, more and more investors are turning to major US real estate markets: New York, San Francisco, Chicago, Miami.  

2) The China Effect With Chinese investors becoming the biggest foreign buyers of US real estate in 2015, economic news from the People's Republic is all important to property in the US. 

3) Regulators Have Their Say The SEC's Office of Compliance Inspections and Examinations will continue to put major funds through compliance tests they started in late 2012. Fund managers need to make sure they dot all of the i's on the legal front to not end up paying billions in fines like HSBC, JP Morgan, et al. M&As Continue Going Strong 

4) M&As Keep Going Strong Last year was a record year for M&As, totaling $79.3B across 34 deals anchored by monster deals like the $12.2B Marriott-Starwood merger. 

5) More REITs to go private in 2016. With more and more dry powder on the market, REITs cannot use this chance to have their say.

The US is waiting for the results of the elections to correct the trends as the case may be though, so staying tuned for the news of the next week...

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