Learning or Partnering? An Investigation of Foreign Real Estate Investment Strategies

Melanie Zhang and Anupam Nanda

ERES from European Real Estate Society (ERES)

Abstract: This study examines international real estate investors’ strategy choices and the implications for the commercial real estate (CRE) market. The empirical work adopts a network analysis framework to quantify the market connections of the institutional investors and their influences, with a two-stage endogenous binary model employed to address foreign investors’ incentives to choose strategic partnerships and strengthen the bargaining power in the host market. We first show network patterns and dynamics. We also highlight the impact of network formation on transaction pricing. The findings from selected CRE markets in England indicate that investors with broker representation, foreign investors, and those working with external management partners achieve pricing premia in property purchases. The local experience accumulated from past transactions strengthens bargaining power. Compared to London and non-London markets, it also looks at how the institutional environment might affect the prices of goods and services in both places.

Keywords: commercial real estate; international investor; Network Analysis (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2023-01-01
New Economics Papers: this item is included in nep-net and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2023_89

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