Dec. 5, 2014, was the last day Joshua Goldfarb, managing partner of Multi Housing Advisors (MHA) was taking bids on a 1,208-unit, four-complex property in the Atlanta area. 

“They were built in the early to mid ’80s and are primed for repositioning because the owner was [in] equity position for four years [after taking over the properties from the original sponsor],” Goldfarb says. “They want to just dispose of them at fair-market value but have not taken them to their potential because it’s not their platform.”

Before 2008, this type of ’80s-era portfolio would have brought largely local interest. But as apartment values have risen around the country, more large equity funds, chasing yield, are seeking value-add opportunities in the market. 

“We’ve seen a lot of large equity come in and want to acquire something en masse so they have an instant economy of scale in Atlanta,” he says. 

But that’s not the most surprising part. The kicker is where the interest is coming from.

“There’s a lot of Canadian interest and interest from Israel and South America,” Goldfarb says. “The bulk has been foreign. And, it’s not just this deal.”

As of early this month, $4.14 billion of foreign capital had come into the apartment sector last year, according to New York-based commercial real estate research firm Real Capital Analytics. That’s less than the $5.16 billion transacted in 2013. But both numbers represent a sharp increase from the $4.2 billion in 2012 and the $4.09 billion in 2011. 

“Multifamily is becoming an institutional global asset class,” says David Schwartz, CEO of Chicago-based Waterton Associates. “In the U.S., we have most sophisticated, largest, and most liquid of any multifamily anywhere. I think foreign capital enjoyed the positive leverage and dependable cash yields.”

Uncertainty in other countries also helps drive this investment.

“U.S. real estate as an industry is the beneficiary of the global challenges occurring in every foreign economy,” says Brian E. McAuliffe, senior managing director for Los Angeles–based CBRE Group. “The U.S. is a safe haven. What we’re seeing across the multifamily sector is that an unprecedented amount of diversified foreign capital sources are investing in multifamily. Historically, it’s been one region of the globe that’s more dominant [at a single time].”

The numbers back McAuliffe up. In 2013, Canadians were the largest cross-border investor in the multifamily space, a trend that looks to continue. In 2014, investors from Canada (76 properties at $1.582 billion), Switzerland (11 properties at $942 million), Bermuda (five properties at $917 million), Saudi Arabia (10 properties at $386 million), Japan (nine properties at $267 million) and Israel (eight properties at $265 million) have been the leaders in international apartment investment, says RCA.

CBRE sees capital coming in from all of those sources. “[Last year, we had] significant capital inflows coming from Asia, the Middle East, and Europe, and Australia,” McAuliffe says. “Then you have the South American influence that’s occurring in South Florida [though some of that shows up in condo sales].”

Traditionally, these investors have focused on key gateway markets, like New York, Miami, and San Francisco. But Goldfarb thinks, like everyone else, they’re searching for yield in Atlanta.

“They see room to grow in our recovery and access to an airport,” Goldfarb says. “Those markets [the gateway markets] have recovered much faster. They’re [foreign investors] are looking Atlanta as a lagging market where there’s still room for growth.”

In many cases, this foreign interest is having a noticeable effect on the overall sales market.

“What’s really driving it [the overall market] is the international community has taken a liking to us multifamily,” Mark Alfieri, CEO of Plano, Texas–based Monogram Residential Trust. “It’s probably the preferred asset class right now. We certainly hear a lot from foreign investment pension funds [interested in the business].”