Canadians snap up U.S. commercial real estate at recordpace

MONTREAL Tue Nov 18, 2014 11:49 pm EST

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Reduced Manhattan is seen following sunup from the observation deck of the Realm State Buildingin New york city April 16, 2014.

Credit rating: Reuters/Brendan McDermid

MONTREAL (Reuters) - Canadian financial investment in UNITED STATE industrial genuine estateis on track to hit document degrees this year, as soon as Canada's second-largest pension fund shutsa $2.25 billion bargain to buy a landmark Manhattan property, according to data from residentialproperty study firms.

Canadian pension funds as well as designers have actuallybeen increasing their financial investment in foreign realestate this year, mainly in the United States, as they look foralternatives to a combined residential market.

The bargain by Ivanhoe Cambridge, the real estate arm ofQuebec's Caisse de depot et positioning, and also Chicago-based Callahan Resources Characteristic, to purchase the 42-storey 1095 Opportunity of theAmericas structure in Manhattan from Blackstone Group (BX.N) has actually not yet shut, 2 peopleacquainted with the issue stated. Caisse de depot et placement manages Quebec public as well asprivate industry pension funds and also insurance funds.

A last statement of the investment might take weeks.

Canadians had already put even more than $8 billion into UNITED STATE business actual estate inthe initial three quarters of 2014, going beyond the $7.8 billion invested during the same period in2013, baseding on Jones Lang LaSalle and also Real Resources Analytics. Canadians invested $11.86billion on UNITED STATE industrial residential property in all of last year and also they are ontarget to exceed that in 2014.

"The residential Canadian market is quite snugly held by the residential pension funds," said LucyFletcher, vice head of state, worldwide funding team as well as funding markets at Jones Lang."Really few of the properties are selling the present market."

Canada has been the most significant foreign buyer of UNITED STATE business residential propertyfor the past four years, according to information from New york city City-based Real Capital.

Given that 2010, Canadian investors have actually purchased $43.4 billion in commercial UNITEDSTATE property - or 1,530 homes - spending 4 times as much as second-placed China.

The Ivanhoe offer was formerly stated in the Wall Street Diary. Upon completion, it will mark thesecond-highest rate paid for an workplace building in the U.S. given that the 2008 sale of theGeneral Motors building in New York for $2.8 billion.

A representative for Montreal-based Ivanhoe Cambridge, which has $40 billion in assets, decreasedto comment. The Quebec fund's other New york city financial investments include Manhattan officetowers 1211 Method of the Americas and 1411 Broadway.

The purchase would certainly be the most up to date UNITED STATE acquisition by IvanhoeCambridge with Callahan. Both developed an alliance in 2012 to expand Ivanhoe's UNITED STATEcommercial holdings.

(Reporting by Allison Lampert; Editing by Martin Howell)

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