Canada tops the list of foreign investors in US multifamily

This article is the third in a series looking at the effects of international investors on America’s multifamily sector. Click here for the first article and here for the second.

In 2021, for the first time in a decade, the countries that have consistently spent the most on multifamily properties in the United States — Canada, Bahrain, Switzerland, Israel, the U.K., Singapore, Germany, Japan, China and the Netherlands — shifted.

Israel, Germany, China and the Netherlands dropped out of the top 10, usurped by Saudi Arabia, Australia, South Korea and Mexico, according to Matt Vance, senior director and Americas head of multifamily research for CBRE Econometric Advisors.

Vance isn’t sure why this happened, but he expects the mix to revert over the next couple years.

“The data is fairly noisy,” he said. “I don’t expect this to represent some new lasting trend in who’s going to invest in U.S. multifamily. I’m an economist, and when I see over the past 10 years that 89% of all investments came from the same 10 countries, my economist gut is telling me the 2021 numbers were more of an artifact of country-level specific dynamics that changed things up for a year.”

Investment outlook

Vance, along with everyone else, is absolutely sure about one thing: Canada — which has accounted for about 50% of all cross-border investment in multifamily over the past decade — will continue to lead the pack for a long time to come. 

Canadians invest heavily in U.S. commercial real estate because they have a lot of wealth and relatively few attractive assets at home, half of the U.S. commercial real estate market is within a half-hour flight of Toronto and the two countries share similar legal structures and (for the most part) language, said Jim Costello, senior vice president and chief economist for RCA.

Canadians spent $11.9 billion on U.S. multifamily properties last year, accounting for 56% of all cross-border investment in U.S. multifamily, Jodka said. Leading the way was Canadian property management company Ivanhoe Cambridge, which made headlines when it bought 30 properties from Greystar for $3.6 billion.  

Riaz Cassum, executive managing director, capital markets, and global head of international capital coverage for JLL, agrees.

“We don’t see the Canadians letting up any time soon,” he said.


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