Wednesday, July 9, 2008
Key phrase: Abu Dhabi, Kuwait and other Persian Gulf countries flush with oil revenue have taken advantage of falling prices to invest in real estate and financial companies around the world. Middle Eastern investors have spent $1.8 billion this year on commercial property in the U.S., more than other international buyers, according to Real Capital Analytics Inc., a New York-based property research firm.
Falling prices, flush with cash, makes for good bargains.
Japanese investors spent $78 billion on U.S. properties between the late 1980s and 1995. Many of these transactions, including Mitsubishi Estate's 1989 purchase of Manhattan's Rockefeller Center for $895 million, came just before a U.S. recession sent real estate values plummeting. As a result, the Japanese investors lost an estimated 50 percent to 80 percent of their money during the period.
Could happen again, but somehow it seems to me that the Emirates will do better. Time will tell.