Determinants of Foreign Versus Domestic Real Estate Investment: Property Level Evidence from Listed Real Estate Investment Firms

  • Nathan Mauck
  • S. McKay PriceEmail author


We examine the determinants of foreign real estate investment relative to the domestic case using the portfolios of a large sample of publicly traded real estate investment companies; where foreign investment is defined as the property owner headquarters being located in a different country than a given asset. The cross-sectional results provide strong evidence that real estate firms are more likely to take a smaller stake in larger assets when investing abroad. The penchant for large assets holds when controlling for economic activity, real estate investment opportunities, depth and sophistication of the capital markets, investor protection and the legal framework, administrative burdens and regulatory limitations, and the socio-cultural and political environment at both the property nation and headquarter nation levels. In general, foreign ownership is less likely with industrial, office, retail, and self-storage properties. Capital market development is consistently negatively related to foreign investment.


Real estate investment International real estate International finance Foreign investment 

JEL Classification

F21 G11 G23 O16 O18 P52 



We appreciate the helpful comments and suggestions of an anonymous reviewer, seminar participants at Lehigh University, and conference attendees at the 2015 annual meeting of the American Real Estate Society. In conjunction with the latter event, this study was awarded a prize as the best paper in real estate portfolio management, sponsored by the Royal Institution of Chartered Surveyors (RICS). We also thank Wei Huang for excellent research assistance


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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.University of Missouri - Kansas CityKansas CityUSA
  2. 2.Collins-Goodman Fellow in Real Estate FinanceLehigh UniversityBethlehemUSA

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