AFIRE: FIRPTA Could Make a Difference via GlobeSt

To read the newly-released annual Association of Foreign Investors in Real Estate survey, one could easily conclude that the luster of the US real estate market is fading for many foreign investors—although not to the point where any one market could conceivably grab the top spot from the US.

Such an assumption would be correct, James A. Fetgatter, chief executive officer of AFIRE, tells GlobeSt.com. “I think what is happening is that investors are looking for alternatives to the US and Europe, but they are not planning on abandoning these markets,” he says. “Not at all.” It would be impossible, even if investors wanted to, he says—alternative markets such as Brazil will never be able to match the inventory of real estate that the US and Europe offer. “The bulk of most investors’ portfolios is based in the mature markets of the world, and that is largely North America and Europe,” Fetgatter says.

Still, this trend of looking for alternative investment locations is, to state the obvious, an uncomfortable one for the US real estate community, which is struggling to regain its equilibrium. The AFIRE survey also offers one suggestion as to how to get foreign investors to refocus on the US: a tax regime that doesn’t impose additional taxes on their transactions. Namely, a change to or repeal of Foreign Investment in Real Property Tax Act, or FIRPTA.

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