Recently, Newport Beach, CA-based Landmark Capital Advisors expanded its team in an effort to better serve international and family office investors. Connect Media asked the real estate capital advisory firm’s David Kidder to share what’s driving the market for these capital sources.
Q: What are the key long-term trends in real estate financing that you are tracking, and how are they expected to play out for CRE investors, in particular international and family office investors?
A: International investors are increasingly looking to diversify their investment holdings outside of their domestic markets, and major markets in the U.S. are definitely among the preferred destinations. Foreign direct investment in the U.S. continues to grow every year, and we see this growth as a long term trend. Real estate is also a favored asset class, and international investors who have capital to deploy can find attractive real estate investment opportunities across the capital structure, especially in the sub-institutional space where we are very active. Similarly, we feel that family office investors are also well positioned to take advantage of the current market opportunity to provide liquidity to projects in this space that are particularly well matched to their profile and investment criteria.
Q: What are the main impacts of international and family office investors on CRE across the SoCal region?
A: In Southern California, international investors have already been a significant source of demand in the residential real estate market, buying both new and existing homes at a rapid pace. Individual international investors have also participated in the commercial real estate markets, often through established programs such as EB-5.
Relatively speaking, family office investors have traditionally been more active in commercial real estate, both as operators and investors. We feel that, if given the access, both international and family office investors have the interest, flexibility, and resources to play a much bigger role in financing a variety of sub-institutional commercial real estate deals.
Q: What are some of the key aspects international and family office investors are seeking with investments?
A: It’s difficult to generalize what international and family office investors are seeking with investments, as there is a broad spectrum of criteria that drive the decisions of these investors as it relates to real estate. For example, some may be looking to diversify out of securities and into direct real estate investments, and some may be looking to diversify within their real estate allocations into different types of positions, be it repositioning within the capital structure, to moving to other asset types or different markets. Regardless of the differences in mandate, we believe that these investors are interested in expanding getting additional exposure to a wider variety of transactions and projects.