While rising interest rates, capital hesitance and construction costs are contributing to slowed real estate investment and development in the U.S., international investors aren't deterred.
International investors and developers still see the U.S. as a stable place to invest and build, particularly because of the long-term demand for high-quality properties that are anticipated to outweigh current capital market conditions.
They are showing enthusiasm for the long-term stability and growth opportunities presented by developments in prime markets like New York City, Miami and Los Angeles.
"Turkey has a high-inflation economy," said Sinan Temo, CEO of BLG Capital, a Turkish private equity real estate firm. "Real estate is probably one of the main asset classes that preserves value against inflation."
Temo said it's more difficult to secure financing for real estate projects in Turkey than it is in the United States - even in today's challenging market. That's why Serdar Bilgili created BLG Capital.
"Financing was always an issue," Temo said. "We don't have capital markets in Turkey. We have limited access to debt. He decided to do as the U.S. or Western institutions were doing in Turkey."
While U.S. developers sit on the sidelines waiting for a market correction, BLG is finding plenty of opportunities in America to use its expertise in development and historic preservation.
"There's not much appetite in the U.S. market to redevelop something or put equity into an already depreciating building," Temo said.
BLG has completed some of the most significant historic preservation projects in Istanbul, including the Akaretler Row Houses. Built by Sultan Abdulaziz in the 19th century to accommodate high-ranking individuals of the nearby Dolmabahce Palace, the row houses have been transformed into a 592,000-square-foot redevelopment that includes 98 offices and residences, 42 shops and restaurants and the W Istanbul.
The company has brought its historic preservation expertise to the United States, where it restored a 354,000-square-foot 18-story historic building at 711 Fifth Avenue in Manhattan - famously known as the Coca-Cola Building - which continues to attract tenants.
"We really like historic buildings and giving new identities to historic buildings," Temo said. "It's what we love to do and what we specialize in as a developer."
The company has been doing ground-up development in the U.S. since 2018. Its latest New York project is 125 Greenwich. It's partnering with Italian firm Bizz & Partners to develop an 88-story residential skyscraper in downtown Manhattan.
