As the coronavirus pandemic raised the demand for the shipment of goods, industrial became a darling property type for investors, including overseas investors looking for a place to put their capital in the United States.

To that end, two such overseas investors have formed joint ventures with industrial specialists to invest as much as $1B each.

Mubadala Investment Co. has formed a joint venture with Crow Holdings to develop $1B of industrial properties in the United States. Abu Dhabi-based Mubadala is a sovereign wealth fund of the United Arab Emirates and has about $243B in assets.

"Mubadala is seeking to invest directly in industrial real estate in the U.S., and to do so at scale," Crow Holdings CEO Michael Levy told Pensions & Investments. "This is a true joint venture, with Crow Holdings serving as both a developer and capital partner."

AIG Global Real Estate, the real estate arm of global insurer AIG, has formed a U.S. industrial joint venture with LB Asset Management on behalf of three Korean institutional investors. The target of the JV is an 8.6M SF portfolio of 86 industrial properties mainly in the Southeast.

"The portfolio is uniquely positioned in product type and geography and provides an opportunity to achieve immediate scale in the U.S. industrial market," LB Asset Management Managing Director Yun Seok Cho told Real Assets.

In previous cycles, downtown office towers tended to attract the attention of the largest overseas real estate investors, especially since their size allowed the deployment of hundreds of millions of dollars at once. But now, the long-term stability of office assets has come into question and investors are looking elsewhere.

"There’s a flood of capital worldwide looking for some sort of yield, so there has been capital going into alternative CRE just as a way to find opportunities, because it’s so crowded elsewhere in the market," Real Capital Analytics Senior Vice President Jim Costello told Bisnow.

In May, a survey by AFIRE, the association for international investors in U.S. commercial property, found that on the whole, investor outlook was positive, with about 3 in 4 investors expecting their U.S. investment activity to increase in 2021. Multifamily remained the top choice among overseas investors, with 86% saying they planned to increase exposure in that property type over the next three to five years.

Not far behind was industrial, with 79% of overseas investors in U.S. commercial real estate anticipating expanding their exposure to that property type. The survey was based on results from March, early in the vaccination effort against the coronavirus and before the delta variant caught hold. It gathered the opinions of about 200 organizations in 24 countries.