G
lobal investors are reassessing their exposure to US assets, including commercial real estate (CRE), due to tariff-related concerns. This has sparked questions about the potential impact on CRE in the US and globally. To address these concerns, we analyzed historical cross-border CRE investments for insights.

    Our analysis shows that a sustained pullback of cross-border capital investment in US real estate would have varying impacts depending on location, property type, and asset size. Non-traditional sectors like medical offices and self-storage are likely to be less affected, as well as smaller and moderate-sized assets in non-gateway markets.

    However, larger assets in gateway metro areas, such as New York City, Los Angeles, and San Francisco, may experience a moderate to material impact. Similarly, market/sector combinations where cross-border investors have historically been active, like CBD offices and full-service hotels, are also expected to be affected.

    To manage risk from potential liquidity and pricing impacts, we recommend focusing on smaller and moderate-sized assets in non-gateway markets or increasing allocations to non-traditional sectors with strong tenant demand and limited new supply.

    The US is the largest global CRE market, accounting for 38% of global transaction activity over the past decade. However, cross-border CRE investment in the US is lower than other key global markets. A reallocation of capital away from the US would likely have a significant impact on markets like the UK, Germany, France, and Australia.

    Investors should consider these factors when evaluating their exposure to US CRE and explore alternative strategies to mitigate potential risks.