Since the Federal Reserve reduced rates at the beginning of the COVID-19 pandemic, hedging costs have come down for foreign investors.
"That [hedging] is the cost of insuring against the movement in the currency that's being invested versus the dollar," says Alex Foshay, vice chairman and head of Newmark Capital Markets' International Capital Markets Division. "Institutions in many countries around the world that are investing in the US are required by law to hedge the equity portion of their investment, most notably Korean institutions and German open-ended funds."
That led to increased international investment into the US commercial real estate market, according to Foshay. In a pandemic year, when investment volumes declined overall, some countries stood out.
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Leslie Shaver
Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to GlobeSt.com and Real Estate Forum.
