Business isn’t just back, it’s booming like never before.
A record $746 billion was invested in commercial real estate in the United States in 2021, including an incredible $296 billion in the fourth quarter, which is also a three-month high, according to a new report from CBRE.
These metrics show an 86% increase from the previous year, when the pandemic hit, and a 90% increase from the fourth quarter of 2020, respectively. For comparison, CBRE estimated that total US investment for all of 2019, before the pandemic, was $573 billion, and the fourth quarter of that year was $173 billion.
the the multi-family sector paved the way in the fourth quarter with $136 billion, and for the year with $315 billion, according to the report. With persistent supply chain issues and a growing e-commerce sector, industrial real estate recorded the second largest investment in the fourth quarter with $64 billion, up 55% year-on-year. Investment in offices also increased in 2021 from the previous year, up 73% to $50 billion, as a significant portion of workers returned to the office in one way or another l ‘last year.
CBRE also noted that private buyers accounted for the largest share of investment volume in the final quarter of last year at $143 billion, or nearly a fifth of the total. And real estate investment trusts and public companies traded $35 billion.
Among individual markets, Greater Los Angeles led 2021 in investment volume with $58 billion, 83% more than in 2020, and 18% more than in 2019. LA was followed by New York with $49 billion in 2021 and Dallas with $41 billion, according to CBRE .
Meanwhile, among the regions, Sun Belt Markets posted the highest year-over-year growth rates. Investments in Las Vegas have jumped 232% since the casinos were closed in 2020. Houston jumped 191%, which was the biggest increase among the top 20 markets, and South Florida rose 179%. South Florida also saw a 228% increase in office investment to $5.2 billion and a 240% increase in multi-family buildings to $13.1 billion.
The Washington, DC area saw the 10th highest investment, up 52% from 2020.
Foreign investors brought in 115% more in the fourth quarter of 2021 than in the same period of 2020. Foreign capital accounted for $56 billion, or 7.5% of the total investment volume in 2021. Canada was largest source of foreign capital in 2021 with $21 billion. , followed by Singapore with $15 billion. The mix is drastically different from when China led the list by a wide margin a few years ago.
Gregory Cornfield can be reached at [email protected].