San Diego, CA (PRWEB) December 04, 2012
The Real Estate Marketing Insider offered its observations on news that Norway would invest a portion of its sovereign wealth fund in the United States real estate market. REMI believes this is great news for the real estate market, and has some advice for realtors looking to capitalize on the new foreign investment.
Norway’s $660-billion sovereign fund is the largest of any nation in the world. Five percent of the fund must be invested in real estate, and fund managers are hoping to invest about 1.7 percent in the United States. That number works out to just about $11 billion, a sizable number that would prove to be a huge shot in the arm for the American real estate recovery.
Norway is far from the first country to turn to real estate as an investment. It’s often a first destination for sovereign wealth funds; real estate is usually higher-yield than government bonds, and less affected by inflation than other investments. Singapore, China, Kuwait and Qatar have all allocated millions of dollars of their sovereign funds to real estate.
The question for REMI and real estate professionals is how this will affect the real estate market in the U.S. Norway’s history of real estate suggests that it will focus on commercial real estate, like malls, office complexes and major-city structures. So, if you’re a realtor who specializes in commercial holdings in major cities, you’ve got about $11 billion headed your way; these realtors will want to make sure that their portfolios and operations are in good shape.
For smaller real estate firms, the big payout may come later; should Norway expect to diversify its holdings, it will likely invest some of its funds in luxury housing and multi-family complexes, which can still sell for big prices and generate lots of return on investment. Agents who deal in these kinds of properties should make sure to watch for calls from buyers affiliated with foreign consulates like Norway’s, as they’re likely a sure sale. In the meantime, real estate branding will be key, as overseas firms (including sovereign wealth funds) will likely choose their realty based on reputation rather than traditional marketing.
The Real Estate Marketing Insider shared its opinions on news that Norway is expecting to invest about $11 billion of its sovereign wealth fund in the United States real estate market. While most of the investment dollars will go toward large commercial properties, REMI advised realtors to get ready for possible foreign sales at housing levels as well, particularly luxury and multi-family.
About the Real Estate Marketing Insider: REMI, a La Jolla, CA-based online journal, is the real estate professional’s destination for breaking news, hot marketing tips, and trend analysis.