CHICAGO—The US real estate market will continue to be boosted by foreign investors in 2016, thanks in part to the combination of a strong US dollar and the devaluation of currency in other non-US markets. And the Chicago region should continue to see enormous benefits from the trend.

In fact, as of early December, foreign investors had already spent $3.27 billion on Chicago-area real estate, well above the current full-year record of $2.18 billion set in 2013, according to Real Capital Analytics.

"People are much more comfortable buying properties across state lines than they were ten years ago," Michael Thanasouras, managing director of SVN | Chicago Commercial, tells GlobeSt.com. "And that is the case with international investors as well, who have become much more comfortable buying in the US."

As reported in GlobeSt.com, even though Chinese investors garner a lot of notice, some of the most active foreign buyers in the past year have been Germans, Canadians and investors from Singapore. "Culturally, the Canadians understand the US," says Thanasouras. "Chicago is very close and has a lot of connections with Canadian cities." Furthermore, "at one point, their currency was better than ours, and that may have brought them in." And even though the Canadian dollar has declined, our northern neighbors still have a taste for investments here now that they understand the market.

Thanasouras suspects that 2016 won't be a record year for foreign investment in Chicago. Still, "we saw a lot of transactions that we originally thought would close in 2015 that are moving into next year." Therefore, the first half of the year should be quite strong, and even if no new record is set, 2016 should come fairly close to the amount seen in 2015.

But big changes could still be ahead in the coming year. So far, most foreign investors have concentrated on buying the safest, most significant properties in the CBD. But now that they have gotten more familiar with the market, many will begin to examine smaller properties in adjacent submarkets such as River North and the West Loop, Thanasouras says. 

"Foreign investors now have infrastructure here, including boots on the ground, and they have also seen how companies like Sterling Bay have made a living in these neighborhoods." He does not expect foreign investors to launch developments on that scale, but some may now feel bold enough to buy properties that could use a little rehab. "They may be looking to ride the wave that Sterling Bay has started."