Oil Money Goes Elsewhere

New York ranks as the number one place worldwide for foreign commercial real estate investment. Last year, Middle-Eastern buyers bought over 8 billion dollars in US property

By: James R. Lindamood

Even though Middle Eastern buyers have snatched up nearly 4 billion dollars in real estate in the last 2 months, Middle-Eastern buyers that are flush with cash are expected to show less interest this year than in previous ones.

Last year, Middle-Eastern buyers bought over 8 billion dollars in US property. With this year well past the halfway point, buyers from countries such as Kuwait and the UAE have shelled out less than half the amount as last year. As of the mid-year sales numbers, sales of office space were only a third of last year, retail was down 62 percent, and industrial sales were down by half. With numbers like these, it's easy to see that the Mid-East nations have cooled on American property, despite the sales of the GM and Chrysler buildings.

New York ranks as the number one place worldwide for foreign commercial real estate investment. According to a survey conducted by the Association of Foreign Investors in Real Estate in the fourth quarter of last year, that is up from Number 2. Foreign investors view New York as a safe haven, according to Joseph Gulant, a partner at Blank Rome LLP. Mr. Gulant's firm helps in negotiations during foreign commercial real estate transactions.

Some Congress members have raised their own concerns, however, about the amount of money that Sovereign Wealth Funds have placed in the US. Sovereign Wealth Funds are made up primarily of government investment capital, and in recent years over $40 billion dollars has been invested in companies such as CitiGroup, and Merrill Lynch & Co.