Immigration & Investment: 5 Countries Quietly Shaping U.S. Real Estate in 2025

Episode Transcript:  

   We've all heard a lot about immigration lately, but did you know that some of the biggest immigrants coming into the United States is actually in the form of millions and millions upon millions of dollars into US real estate? We're gonna unpack which countries and why they continue to invest in the United States.

Let's get REady2Scale.

Hey guys, my name is Jeannette Friedrich, director of Investor Relations here at Blue Lake Capital, coming to you today from Los Angeles, California. Now, I thought it would be very interesting for people to understand just how interconnected US real estate is across the globe and who some of the most.

Largest players are when it comes to this. So first and foremost, coming in at number one is Canada. Canada is essentially a pension powerhouse. Canada has invested $184 billion in US commercial assets since 2015, making it larger, the number one investor. In the US more than any other country. In addition to that $184 billion, they've also invested 5.9 billion in homes, single family residential homes, just last year, accounting for 13% of all foreign investment deals in residential real estate in the United States.

Now typically Canada focuses on industrial multifamily, and interestingly enough, Sunbelt office product. Why do they invest in the US instead of in Canada? Well, for a few reasons. First of all, a lot of the capital from this is driven from pension funds and they are looking for long duration dollar denominated cash flow that typically cannot be found in any other country, but the United States.

In addition to that, when it comes to legal transparency, we're pretty on par with Canada, but our yields are actually higher. Lastly, Canadians have access to deep debt markets and that allows them to be able to scale out quickly, and really the United States is the only market that is. Poised to be able to handle that type of scale at that type of speed.

Now, coming in at number two is China. So China basically is all about cash For condos and college, they have actually invested $7.5 billion in residential properties accounting for essentially 11% of the share of all foreign residential deals. Typically they dominate in the all cash market. So when you see these signs that say all cash for your home, that could very well be a Chinese buyer.

They like to focus on single family homes as well as condos near top universities. So think for example, in Boston, LA, or Seattle. Now why are they investing in the US instead of in China? Well, first of all, it's a capital flight hedge against the yuan volatility. Secondly, it's actually focused on an education pipeline.

Why pay rent when you can just buy the entire dorm instead, which they definitely do. And last but not least, incentives like the EB five and other visa paths. Secure residency for families. So you may not have ever even heard of this or been aware of this, but there is actually a program called the EV five Immigrant Investor Program that is actually.

Sponsored and funded by the US government that allows foreign investors that invest a million dollars or more, along with some additional requirements that they have basically in exchange for a green card, which is the equivalent of permanent US residency in the us. Now coming in at number three is Mexico.

Mexico is basically playing a neighbor strategy, which makes a lot of sense given the geographical proximity of the country to the United States. So Mexico has invested $2.8 billion in US home purchases, accounting for, again, 11% of foreign residential deals. They typically focus on the Texas border metros.

Phoenix and are very big on vacation rentals in Florida. So why are they making these investments in the us? Well, like I said, geographical convenience, and a lot of them are dual citizen families, so it just makes sense because the countries are so close to each other that they can easily travel between the borders.

Second of all, the US dollar is very strong in comparison to Mexican currency, and this provides them with a lot of cash flow. That pa, that packs a big punch in Mexico. Uh, typically a lot of these properties are also used for Airbnb, which also further enhances the cash flow that they're able to capture in these tourist hubs.

Now coming in at number four is India. India is tech driven, and basically they have invested $4.1 billion. That's essentially 10% of foreign investment deals and are actually the fastest growing segment because of their tax focus. So they like to look at suburban areas that are near tech corridors. So think of the Bay Area.

Austin Rally. Now, why are they doing this in the us? Well, first of all, it's long-term wealth parking, frankly, because what they're doing is they're finding ways to park their cash for long-term investments because the rupe remains so volatile. In addition to that, it's also similar to what the Chinese do when it comes to taking advantage of an H one B to green card pipeline.

Uh, basically they help use these properties to establish that those coming over on the H one B are establishing roots with their families, hopefully leading to a path to citizenship. And last but not least, rental yields definitely beat most Indian metros, especially when it comes to after taxes. Is now, last but not least, coming in at number five is the Gulf sovereigns.

Essentially the mega check. Now basically, Qatar has invested over $500 billion, or at least pledged to in the US over the next decade. This is gonna be focused on data centers, life science companies, trophy offices. We're talking class A luxury. As well as private credit that is tied to real estate deals.

Now, why are they doing this in the us? Well, first of all, they're looking for diversification away from oil dollar assets, basically perform as a hedge against them for petro currency risk. In addition, because we're talking about. Such a huge sum of money, $500 billion. The reality is that only the US market can absorb that type of multi-billion dollar deployment, that there's no other market that could even take in and deploy that influx of capital.

And because they also typically don't have the political alignment to scale in that area either, as you have likely seen on the news. So the takeaway for all of you today is that immigration isn't just people, it is capital. So while headlines are debating about border crossings and border walls and all kinds of other things, the reality is that global capital is freely flowing between borders.

All the time. So from the Canadian pensions to the Gulf Wealth Fudge funds, foreign investors are choosing us real estate over and over and over, mainly because of three reasons. One, there's the rule of law security, meaning that us real estate laws are very well established and typically very well guarded.

Second of all, there's liquidity and third of all, solid cash flow. So understanding who and why these players are involved in the US real estate market can help give investors an edge in driving pricing, competition, and ultimately your returns. I hope you guys found this to be insightful and helpful. Be sure to follow us for more data-driven insights@bluelakecapital.com.

Ready to Scale is brought to you by Blue Lake Capital, where we hunt down the best multifamily investment opportunities that we can find and invite investors to join in with us. We target class B value add multifamily properties across the Sunbelt. Our CEO Ellie Pearlman invest a substantial amount of capital into every deal.

This means our interests are aligned with yours. If you're an accredited investor looking to expand your portfolio and diversify sponsors, be sure to visit us@bluelake-capital.com. Blue Lake capital, be bold, be extraordinary, and keep moving forward.