Chrysler deal fails to ignite US investment

TOWERING DEAL: But US investment from the Middle East is expected to cool. (Getty Images)

Middle East investment in US real estate is expected to be flat or down this year despite the $3.7 billion acquisitions of New York's Chrysler Building and the General Motors Building, the Associated Press wrote on Tuesday.

Investors from the Middle East have spent $2.7 billion on U.S. assets in the year to date, according to data from real-estate research firm Real Estate Analytics Inc. At that pace, full year sales will be significantly below last year's $8.2 billion.

The current investment climate has given cash-rich Gulf governments an edge over other investors as the cost of debt remains high in the wake of the global credit crunch and US property prices continue to slump, although prices have held up in Manhattan.

But in recent years Middle East investors have encountered what many consider to be xenophobic sentiments in the country.

"There's some reaction in the Arab investment community to some of the difficulties of doing business here," especially following the political backlash over a U.S. ports deal two years ago, Scott Arnold, head of real estate law group at King & Spalding LLP, was quoted as saying.

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