Canadians Buy U.S. Landmark in Foreclosure Auction

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With the U.S. government's push to attract more foreign real estate investors, it comes as no surprise that they are swiftly snapping up some of the country's best properties -- including a National Historic Landmark.

Canadian hotel and resort company, Skyline International Development Inc., has just landed the historic Arcade in downtown Cleveland for a little under $7.7 million, Cleveland.com reports. Skyline snapped up the landmark property at the minimum bidding price during a foreclosure auction today.

Though the company already owns over 2 million square feet of commercial real estate overseas, the Arcade building is Skyline's first U.S. acquisition. Company president Gil Blutrich revealed, however, that the company had been "watching" the U.S. real estate market for years.

"We're very excited for all the investments that the city and the private sector are investing in downtown Cleveland.... Overall, we feel that it's the right time for us," Blutrich told Cleveland.com.

And he's not the only one who feels that it's the "right time" to invest in U.S. commercial real estate. In an annual survey by the Association of Foreign Investors in Real Estate, respondents overwhelmingly ranked the U.S. commercial real estate market as their No. 1 choice for investment in 2011, and viewed U.S. properties as the best opportunity for appreciation.

"Investors are becoming more enthusiastic about the prospects for the U.S. economy and are taking aim at real estate investment opportunities in the U.S.," AFIRE chief executive James Fetgatter told Reuters, although he later conceded that investors were generally focused in areas like New York and Washington and "not the entire U.S."

Though geography didn't stop Blutrich, who has expressed plans to throw "expertise and funds" into making Cleveland's Arcade highly profitable in the long term.

The Arcade building, which includes a 293-room Hyatt Regency hotel, was revived a decade ago through a $60 million renovation, but was foreclosed on in 2009 when Chicago-based owners Arcade LLC defaulted on their $33.3 million mortgage.

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Canadians Buy U.S. Landmark in Foreclosure Auction

With housing prices down and mortgage rates at all-time lows, the real estate market is ripe for investors looking to cash in on the one sector that's booming: rental demand. As a recent Move.com report suggests, college towns make the perfect fit for would-be landlords: Growing enrollment means demand for off-campus housing will only increase. Pair that stability with an expected 5% rise in rental rates, and university towns emerge as very promising real estate investment territory. Here are Move.com's 10 top towns for real estate investors. 

Median List Price: $335,000
Y/Y% Change: -2.62%
Average 2 Bedroom Rent: $3,122
Average 3+ Bedroom Rent: $3,913
Average Mortgage: $1,370

Home to two of the top-ranked colleges in the U.S., Harvard and MIT, it hosts 48 others as well. The median list price is second highest in the rankings, while the average rental rates top all others. 


Median List Price: $189,900
Y/Y% Change: -0.05%
Average 2 Bedroom Rent: $949
Average 3+ Bedroom Rent: $1,020
Average Mortgage: $770

Nashville encompasses 16 colleges and universities, including top-ranked Vanderbilt University. Many of the school dorms are filled to capacity, according to Move's report, forcing a significant number of students to seek off-campus housing. 

Median List Price: $199,900
Y/Y% Change: -16.36%
Average 2 bedroom Rent: $1,780
Average 3+ Bedroom Rent: $2,074
Average Mortgage: $820

The No. 1 most searched city in the country on Realtor.com in June, Chicago hosts a number of universities including No. 12 ranked University of Chicago. The difference between mortgage and rental rates creates the potential for significant profit margins.

Median List Price: $242,700
Y/Y% Change: -7.72%
Average 2 bedroom Rent: $1,443
Average 3+ Bedroom Rent: $1,663
Average Mortgage: $990

Home to the No. 1 ranked university Johns Hopkins University Baltimore's median list price is fairly high on the list. But those prices are falling. In June, the city was the 19th most searched market on Realtor.com.


Median List Price: $163,945
Y/Y% Change: -3.41%
Average 2 bedroom Rent: $1,016
Average 3+ Bedroom Rent: $1,283
Average Mortgage: $670

St. Louis has a median list price of $163,945 and its rental rates provide generous profit margins.

Median List Price: $375,000
Y/Y% Change: 5.63%
Average 2 bedroom Rent: $3,086
Average 3+ Bedroom Rent: $3,214
Average Mortgage: $1,530

As Washington, D.C. further revamps its image, already pricey rental rates will continue to increase. The city hosts more than 20 colleges, including Georgetown University.

Median List Price: $159,600

Y/Y% Change: -13.68%
Average 2 bedroom Rent: $1,236
Average 3+ Bedroom Rent: $1,485
Average Mortgage: $650

Atlanta boasts 19 colleges, and its average two-bedroom property pulls in almost twice as much revenue as what an owner must pay in mortgage costs.

Median List Price: $174,900
Y/Y% Change: -0.06
Average 2 Bedroom Rent: $1,218
Average 3+ Bedroom Rent: $1,478
Average Mortgage: $710

Houston has more than 10 colleges and universities, and its low-priced inventory makes buying there a promising investment that could pay off in the future.

Median List Price: $112,900
Y/Y% Change: 7.53%
Average 2 bedroom Rent: $790
Average 3+ Bedroom Rent: $880
Average Mortgage: $460

South Bend has 12 colleges and universities, whose rental rates provide healthy profit margins. But perhaps the biggest draw of the place is that its home price market appears to be on the upswing, even as so many others in the country continue to limp along.

Y/Y% Change: -3.13%
Average 2 bedroom Rent: $838
Average 3+ Bedroom Rent: $970
Average Mortgage: $630

Syracuse, located in upstate New York, has a number of local colleges and universities with students who must appreciate the low rental rates there. At $154,900, its median listing price is below the national average of $189,900.

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See also:
Hey, Foreign Investors: Buy a Home, Get a Visa
Report: Canadians Buying Up Loads of U.S. Properties
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