Canadian Pensions Bought $2.75 Billion in Commercial U.S. Property in January

Canadian pension funds have collectively invested $2.75 billion in commercial U.S. real estate in 2015, according to a survey conducted by the Financial Post.

Canadian entities, including pension funds, invested $9.7 billion in U.S. real estate in 2014.

More from the Financial Post:

The quick start to 2015 comes on the shiny heels of 2014, in which Canadians dominated the U.S. investment scene, easily doubling the country’s closest foreign rival, Norway, according to real estate research company CBRE.

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While Canadian investment in the U.S. is impressive, it’s still a fraction of the entire investment market in America, which was worth US$434 billion in 2014.

Whether a falling dollar will impact future purchases, Jeanette Rice, Americas Head of Investment Research at CBRE, said, “It could mitigate investment, but there are a lot of other positives to balance each other out.

“We know that since September, 2012, the dollar has [gained] 20%, so it has been significant,” she added.

Proximity and similar customs factor into Canada’s U.S. interest, but the limited ability to grow domestically has also created a need for pension funds to invest abroad, Ms. Rice, the author of the study, pointed out.

“If you want to invest in China, it takes a lot of homework. It’s a lot easier to come visit a property, talk to professionals and so on [in the United States],” she said.

The Canadian invasion has been led by pension players who are heavily weighted in real estate compared to their American peers. Canada’s five largest pensions funds by asset size hold on average 12.7% of their investments in real estate compared to an average of 8.7% for 11 similar U.S. pension funds, according to CBRE.

Read more Pension360 coverage of Canadian pension investments here.

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