- The Washington Times - Wednesday, January 24, 2007

Washington lost its place as the top U.S. city for foreign investment in commercial real estate last year, according to a new survey of foreign investors.

Washington fell to second, behind New York, for the first time since 1999, said the survey by the Association of Foreign Investors, which was released yesterday.

Los Angeles, San Francisco and Seattle ranked third, fourth and fifth for foreign investment, respectively.

The survey reflects the investment preferences of members of the association, who collectively own $601 billion of real estate globally, including $184 billion, or nearly 31 percent, in the United States.

The survey does not show a weakening of Washington’s commercial real estate market, said James Fetgatter, chief executive of the Association of Foreign Investors in Real Estate. Ironically, it shows Washington is a victim of its own success.

“Washington has been so popular among our investors for the past four or five years it is very difficult to find real estate in Washington that will give them the yield they want,” Mr. Fetgatter said. “There are many members that we have that would love to buy property in Washington, they just can’t figure out how to do it at yields that would make sense to them.”

Instead, they are diversifying their investments in the Washington area to suburban residential complexes and resorts. They also are seeking more joint ventures with developers for large real estate projects, such as shopping centers.

Internationally, London remained the top global city for foreign real estate investment, the association reported. New York was ranked second internationally.

Washington, which has held the number one or two spot globally since 2002, fell to fourth place. Paris climbed from fourth place to third and Tokyo held on to the fifth spot.

The survey results largely agree with observations by David Lereah, chief economist for the National Association of Realtors, who spoke yesterday during a meeting of the Prince George’s County Association of Realtors.

Washington’s commercial real estate has withstood a downturn that continues to hurt the residential market, he said.

“D.C. is a very healthy market,” Mr. Lereah noted about the commercial real estate.

In other news …

• Union Station would get a $2 million glass-and-steel structure for bikers to store their bicycles under a D.C. Transportation Department plan. The Union Station Bicycle Transit Center would hold 150 bicycles inside and 30 outside for anyone who pays a $1 daily storage fee. There would be a limited number of monthly passes.

Bikes also could be rented and repaired at the bike station.

The arching structure would be built on the northwest side of Union Station if the U.S. Commission of Fine Arts approves the project, which is expected as soon as this month. The bike station is scheduled to open in spring 2008.

• Largo’s growing role as a business center for Prince George’s County continued with the announcement yesterday that the seven-building Inglewood Business Park was sold to a Boston real estate investment management firm.

New Boston Fund agreed to pay $69 million to MTM Builder/Developer for the 536,197 square feet of complex of offices and industrial space.

Property Lines runs Thursdays. Call Tom Ramstack at 202/636-3180 or e-mail [email protected]

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