From left: William J. Maher, moderator Brian Murdy, Andrea Pauls Backman and Greg Pinkalla at the ULI Spring Meeting in Vancouver, Canada.

From left: William J. Maher, moderator Brian Murdy, Andrea Pauls Backman and Greg Pinkalla at the ULI Spring Meeting in Vancouver, Canada.

When the Thai real estate company Land and Homes came to the United States looking for its first investment, its buyers wanted one thing.

“They did not want office. They did not want retail. They wanted apartments for their first investment,” said Brian Murdy, the national director of Institutional Property Advisors, a multifamily brokerage division of Marcus & Millichap. “They wanted a core, stable asset.”

The result: the company bought an apartment building in Oakland, California, for $104 million, the second-biggest purchase by an international investor in the American apartment market for 2013.

That kind of buy marks a significant change for foreign investors, who have been wary in previous decades about buying apartment buildings.

But they are starting to realize that it’s a valuable asset class and the interest in it is increasing all the time, said Murdy, along with a panel of other specialists in real estate trends and investment management at the 2014 ULI Spring Meeting in Vancouver.

“I think we’re going to get a tremendous wall of capital coming from Asia,” said Andrea Pauls Backman, the managing director of Mesirow Financial. “You’re going to see a big pop. What they’re finding attractive is the amount of income.”

Greg Pinkalla, the chief operating officer of Fairfield Residential, said the new American immigrant-investor program, EB-5, is showing strong promise.

“We’re closing on our first EB-5–enhanced project. It took a while to put all the pieces in place, but once we had it all in place, we were oversubscribed in ten days,” he said. The project required a minimum investment of $500,000 and was looking for $20 million overall. “There’s a lot of wealth being created in China. They’re just trying to get capital out of the country.”

Even American institutional investors weren’t really enthusiastic about investment in multifamily projects until about the 1990s.

Pension funds were worried, among other things, about buying buildings where someone might get evicted and create a storm of bad publicity. Also, the small size of the deals (often in the $30 million–to–$50 million range) often seemed too fiddly.

But that changed, and pension funds are now happily pouring money in. International investors followed suit about a decade later.

There is still some hesitation, said panelists. They represent only about 5 percent of the market, with Canada being the most enthusiastic international investor, followed by Bahrain, Israel, Switzerland, Great Britain, and the Netherlands.

Often, international investors simply do not understand what apartment buildings are all about because they don’t have anything similar in their own countries. In Australia, for example, most apartment rentals are condo units bought by an individual investor and rented out, as opposed to whole buildings that are owned by one landlord.

As well, investors from Europe are wary of wood-frame buildings, which seem impermanent to them, and many international clients are unfamiliar with and uncertain about rent-control legislation.

Finally, U.S. tax law is sometimes an impediment. The United States created special tax legislation for real estate, called the Foreign Investment in Real Property Tax Act (FIRPTA), after a wave of Japanese buying in the 1970s. (As a result, international investors often want to take a 49 percent share only, to avoid tax problems.)

But they are gradually getting comfortable with all of that.

International investors are tending to stick to large, gateway-city markets like New York and San Francisco, which they understand better. But some are venturing into places like Nashville, Tennessee, and Houston.

Some are bringing their own property-management ideas with them.

One Dutch pension fund bought 15 apartment projects and then asked Fairfield to introduce the “Green Globes” sustainability program in order to reduce energy costs, water use, and use of toxic chemicals.

Bill Maher, the director of investment strategy for LaSalle Investment Management, noted that Canada is not seeing the same level of international investment in apartments.

That is largely because it has such an apartment sector. Like Australia, the Canadian rental market has been dominated in recent years by condo buildings where investors buy single units and rent them out.

On the other hand, Canada is seen as more attractive for real estate investment than the United States because its market is not as volatile.