In the late 1980s, seeking high-growth, low-risk investment opportunities, and with an affinity for brick and mortar, European pension funds began to invest heavily in the American real estate market. So much money poured into the United States, in fact, that the pension fund managers decided to start a not-for-profit association for the non-U.S. real estate investment community doing business here. The result was the Association of Foreign Investors in Real Estate, better known by its acronym, AFIRE.
“The primary force was Dutch pension funds,” says Jim Fetgatter, AFIRE’s chief executive, now in his 18th year with the organization. “They were heavily invested in the U.S., and heavily invested in the real estate market.” AFIRE has a small, fulltime staff based in Washington and led by the chief executive. Prior to heading up AFIRE, Fetgatter worked for foreign investors, and had a decade and a half of real estate experience in his native Oklahoma.
Two decades after its founding in 1988, AFIRE remains the only not-for-profit of its kind. The organization’s original purpose was education—both for the foreign investors themselves, and the U.S. professionals doing business with them. This was particularly important after the passage of the Foreign Investment Real Property Tax Act, or FIRPTA, in 1980, an arcane but important piece of IRS legislation that mandates a withholding of ten percent on property sold by non-U.S. owners. The mission now is largely the same, Fetgatter says, although the organization “has evolved into a high-level, exclusive investment organization.”
Unlike many real estate organizations, which are dominated by real estate professionals, AFIRE is comprised mostly of investors.
“We are run and managed by the investors themselves,” Fetgatter says.