Miami was a hotspot for Middle Eastern investment activity between January 2015 and June of this year, according to a new report, with the region sinking more than $500 million into commercial properties.
According to the CBRE report, Miami was the 10th-most popular investment market for Middle Eastern investment during that time period, and the fifth-most when compared to other U.S. cities.
Miami investments from the Middle East totaled $517 million, ranking it behind Atlanta ($852 million), Washington D.C. ($861 million), Los Angeles ($999 million). By far, New York City was the hottest market, raking in $6.8 billion in deals over the past 18 months.
The growing volume of property investments is largely thanks to sovereign wealth funds particularly those of Qatar and the United Arab Emirates, according to the report. Favorable exchange rates and a desire to diversify their assets have also lead those funds to seek commercial real estate deals in the U.S.
The recent addition of direct flights to Qatar from Miami International Airport could also help bring in more investment from the region.
Some of the most notable deals in Miami that involved money from the Middle East include the recent $64.5 million sale of the Viceroy Miami hotel to a Qatari company, which rebranded the property as the W Miami shortly after its acquisition. Kuwait-based KFH Capital was also behind the $120 million purchase of the newly built Modera Town Center Apartments in Miramar, sold by developer Mill Creek Residential.
“The destinations of investment flows from the Middle East are becoming more diverse and are no longer solely concentrated on London and New York City. Other U.S. cities such as L.A., Washington, D.C., Atlanta, and Miami, as well as Asian markets are moving up on their agenda,” said Chris Ludeman, global president of CBRE Capital Markets, said in the report. — Sean Stewart-Muniz