Cross-Border Capital in US Commercial Real Estate: Historical Trends, Future Flows

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Recent geopolitical instability, trade policies and regulatory changes in the U.S. have made cross-border investors question if the country continues to be a safe haven and to offer attractive returns. Investigating several signals in home countries that drive long-running investment patterns by cross-border investors can offer clues as to whether these investors will return, when and to what degree. 

Key findings: 

• Macro signals operate differently depending on whether the capital behind them is predominantly institutional or private. This distinction matters as much as the macro environment itself. 
• Instead of a currency hedge, cross-border investors should use the hedged cap rate in underwriting. When it falls below the cap rate available at home, U.S. deals require heroic assumptions about income growth to hit target returns. This hurdle potentially shuts down cross-border capital flows to U.S. investments. 
• Investment decisions involve mandate constraints, regulatory conditions, market sentiment and factors specific to individual markets and investors that macro variables will never fully capture. How much weight to place on those signals is ultimately a judgment call.

This article was first published in the PREA Quarterly Summer 2026 and is shared with permission. The published version is available at: https://www.prea.org/publications/quarterly/2q26/.