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Mideast Investors Lose Interest in U.S. Real Estate Despite Recent Sales of Landmark Offices

Media outlets around the world picked up Joseph Gulant’s comments on the waning interest of Middle East investors in U.S. commercial real estate—in conjunction with the stumbling U.S. economy—despite recent sales of landmark offices.

Earlier this month, Abu Dhabi Investment Council—one of the world’s largest sovereign wealth funds—bought a 75 percent stake in Manhattan’s ChryslerBuilding for an estimated $900 million. In June, Dubai-based Meraas Capital LLC was part of a joint venture that bought New York’s GeneralMotorsBuilding for about $2.8 billion.

However, Middle East investment is expected to be down this year with this year’s total sales likely falling far below last year’s $8.2 billion in deals.

New York is currently the top spot, worldwide, for foreign commercial real estate dollars. So far this year, property prices have more than held up in Manhattan. The average price per square foot for a Manhattan office is $877, up from $705 dollars from last year.

“There’s a notion it’s a safe haven, that markets like New York City are ultimately going to retain their value,” said Mr. Gulant.

Mr. Gulant expects property values in more popular cities like Chicago, Houston and San Francisco to weather the commercial real estate slowdown better than others and will continue to draw foreign interest.

“Mideast Investors Lose Interest in U.S. Real Estate Despite Recent Sales of Landmark Offices” appeared in International Herald Tribune July 28, 2008. This article also appeared in Forbes.com, Washington Times Online, MSNMoney.com, CNNMoney.com, Dubai’s Emirates Business 24/7, and several others.