HOUSTON — If, as Matt Khourie put it, Houston has become “a gateway city with an asterisk,” can Oklahoma City become “a secondary market with an asterisk”?
Khourie, CEO of CBRE Global Investors, was talking about Houston’s functional promotion to “gateway” global property investment market in light of the flood of capital coming into the United States, especially from Asia.
He told journalists here for the recent National Association of Real Estate Editors annual meeting that capital from China and South Korea “broke out of gateway markets” and started spilling into the secondaries — Houston, Dallas, Seattle, for example — more than a year ago.
Foreign capital, he said, “is even investigating” investment opportunities in the next tier of markets. China wants trophy properties; South Korea prefers good yield, he said.
Khourie said he’s never seen so much foreign capital chasing U.S. commercial real estate — and he’s been in the business since 1980.
Even if it’s not spilling all the way to the third tier, or what PwC, formerly PricewaterhouseCoopers, calls “markets to watch,” a kind of trickle-down effect is probably boosting property markets with the size and prospects of Oklahoma City.
Why? Because domestic institutional investors are being squeezed out of gateway markets such as Los Angeles, San Francisco and New York and moving down the food chain, said John Sikaitis, Washington, D.C.-based managing director for Jones Lang LaSalle. Sikaitis is Jones Lang LaSalle’s director of office and local markets research for the Americas.