Substantial Up-Tick in Foreign R.E. Investment Expected in 2009

- Strong Signals for U.S. -

WASHINGTON, Jan. 12 /PRNewswire/ -- Foreign investors in real estate expect to
spend significantly more in 2009 than they did in 2008. Compared to
transactions completed by October 2008:

-- foreign real estate lenders say they plan to increase lending by 54
percent globally and by 58 percent in the U.S.
-- equity investors plan to increase investment activity by 40 percent
globally and by 73 percent in the U.S. according to the results of the
17th annual survey taken among the members of the Association of
Foreign
Investors in Real Estate (AFIRE) and released today.

The survey was conducted in the fourth quarter of 2008 among the association's
nearly 200 members. Survey respondents hold approximately one trillion dollars
of real estate, including $371 billion in the U.S. The survey was conducted by
The James A. Graaskamp Center for Real Estate, University of Wisconsin -
Madison.

"During the past year, AFIRE members generally took a measured stance towards
new acquisitions," said C. MacLaine Kenan, Executive Director, Arcapita, and
AFIRE's newly elected chairman. "Continued high interest in the asset class
was muted by concern over valuation metrics and the economic environment. As
they expect more favorable investment fundamentals to return in 2009, our
members are poised to move more aggressively on acquisitions."

International Preferences: Washington, D.C. Reigns; Brazil Leaps Toward the
Top
After two years, Washington, D.C. deposes New York to reclaim its status as
the top global city for foreign investors' real estate dollars. London and New
York were in close second and third positions respectively. Receiving
approximately half the votes of the top three cities, Tokyo and Shanghai were
more distant fourth and fifth place choices. Half of the investors' top ten
global cities were located in the U.S.; last year five of the top ten cities
were in Asia.

With 37 percent of the vote, the U.S. was ranked as the country providing the
best opportunity for capital appreciation. In a surprise, with 16 percent of
the votes, Brazil leaped 10 places into the number two slot replacing China
which fell into third place. Reflecting the recent re-pricing, the U.K. took a
significant leap into fourth place (from ninth) and India fell to fifth place
from third.

With 53 percent of the vote, survey respondents ranked the U.S. as the country
providing the most stable and secure real estate investments. With 11.3
percent of the vote, Germany remained in second place tied with Switzerland,
which moved up from seventh place. Tied for third place were Australia and
Canada, each with 4.8 percent of the vote. The U.K. improved its standing,
moving three points from ninth to sixth place.

For 2009, survey respondents expressed a substantial preference for U.S. real
estate followed by properties in Germany, the U.K., China, and Japan,
virtually mirroring the countries targeted in 2008. Japan replaced France
among the top five targets in 2009. For future investments, India and Brazil
were named the top two emerging markets.

U.S. Real Estate Trends
"Our investor members have expressed a growing confidence and interest in U.S.
real estate", said James A. Fetgatter, chief executive of the association.
"Their investment plans for 2009 for the U.S. resemble the flight to quality
that is creating the demand for U.S. Treasuries."

By a wide margin, survey respondents said the U.S. continues to provide both
the most stable and secure real estate investment environment and the best
opportunity for capital appreciation. Respondents also overwhelmingly pointed
to the U.S. as the primary target for their real estate investment dollars and
said that as an average, 45 percent of their portfolio is invested in U.S.
real estate.

In comparing the attractiveness of U.S. cities for their investment dollars,
AFIRE members ranked Washington and New York in strong first and second places
followed by San Francisco and Los Angeles. "A surprise, with almost the same
number of votes as Los Angeles, was Houston's fifth-place ranking," said Mr.
Ortalo-Magne, Chairman of the Real Estate Department and Robert E. Wangard
Chair in Real Estate, who conducted the survey on behalf of AFIRE, "But, I
think this might have been a reflection of the oil prices which were still
very high at the time the survey was taken in October 2008."

Survey respondents said the multi-family sector was the preferred property
type for their investment dollars followed by office, industrial, retail, and
hotel properties. For the last two years, multi-family had been in second
place and office properties ranked first. Industrial properties remained in
third place, while hotels dropped into fifth place and retail rose into the
fourth slot.

Survey respondents also indicated that finding attractive U.S. investment
properties is becoming less difficult. Fewer than 20 percent of respondents
said it was "very difficult" to find attractive U.S. investment opportunities.
This is the lowest percentage holding this opinion in the last five years. As
a comparison, in 2004, 59.4 percent of respondents said opportunities were
"very difficult" to find. And for the first time since 2002, when respondents
said "finding attractive opportunities was the greatest challenge to investing
in the U.S.," 7 percent of respondents said attractive opportunities were
very easy to find, with another 18 percent saying they were "somewhat easy."

Green Matters
When asked to what extent a building's "green" attributes influenced their
decision to purchase a property, 11 percent said "significantly so," and 60
percent said "somewhat so." In almost the exact same percentages, investors
said that green attributes were worth a greater rental premium. This was the
first survey in which these two questions were asked.

AFIRE members have a common interest in preserving and promoting investment in
cross-border real estate. Founded in 1988, AFIRE currently has nearly 200
members representing 21 countries. AFIRE is located at 1300 Pennsylvania
Avenue, NW, Washington, D.C.; (202) 312-1400. www.afire.org

SOURCE Association of Foreign Investors in Real Estate

Kathryn Hamilton, +1-914-767-3428, Kathryn@hamiltonink.com