12/27/2011

Russian to invest 1 billion in US foreclosed property

 Russian billionaire Mikhail Fridman is launching a real-estate fund that will focus on distressed properties from Boston to Miami, in the latest example of a deep-pocketed foreigner placing some chips on the U.S. real-estate market.

Mr. Fridman, who founded the Russian financial-industrial conglomerate Alfa Group, is part of a venture that plans to invest in properties with a total value of about $1 billion, he said in an interview. Most of the money in the fund will come from Mr. Fridman.

P4P comment

Large investors such as the Russian above have access to the very best advice and data. They aren’t going to commit hundreds of millions of dollars on an investment unless they are pretty sure it will pay off. They have the whole world to choose from when making investments.

The American property market is in its 5th year of recession, which is far longer than in any other since the 1930s slump. Millions of foreclosures have gone through the system, with many more to go. It might be described as a re-booting of the US property market. The excess of the years of over borrowing are being swept away, but as always, the process is over shooting. To sell good houses for well under build costs, with a rising population, isn’t a situation that will last. Investors are increasingly realising this and getting their share of the bargains before the opportunity is gone.