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    Home»Property»How Are Foreign Investors Approaching The U.S. Real Estate Market?
    Property

    How Are Foreign Investors Approaching The U.S. Real Estate Market?

    October 2, 20254 Mins Read


    Elie Rieder is the founder and chief executive officer of privately-held real estate investment firm Castle Lanterra Properties.

    Bank calculates the home loan rate,Home insurance,engineer playing a blocks wood tower game (jenga) on blueprint or architectural project,growth concept

    Amid ongoing uncertainty surrounding inflation, interest rates, tariffs and global geopolitical tensions, my real estate investment firm is frequently asked about foreign investors’ sentiments on both the U.S. commercial real estate and the broader economy.

    Given our close partnerships with family offices, high net-worth individuals and institutional investors across Europe, the Middle East and Latin America, I’ve gained valuable insights into the current outlook on the evolving U.S. real estate market, as well as what foreign investors should keep in mind right now when exploring investment opportunities in the States.

    Key Trends Among Investors

    Overall, I believe most investors maintain a long-term perspective on the U.S. Those we’ve worked with view the U.S. economy as resilient. As a result, many investors prefer to allocate capital to U.S. real estate, particularly multifamily assets, which are widely regarded as a stable asset class. This aligns with CBRE’s U.S. Real Estate Market Outlook, which said, “With continued solid fundamentals, multifamily is the most preferred asset class for commercial real estate investors in 2025.”

    That said, political shifts related to global trade and tariffs have prompted some investors to pause, reassess and recalibrate their strategies. They’re considering whether adjustments to their investment thesis are necessary.

    We are hearing from many foreign high-net-worth individuals, family offices and institutional investors that they have become more cautious in seeking risk-adjusted returns. They’re paying closer attention to the numbers and placing greater emphasis on downside protection. This is common during periods of geopolitical uncertainty; downside protection becomes a primary focus.

    Still, relatively speaking, the U.S. continues to be viewed by many as a stable investment jurisdiction. AFIRE’s International Investor Survey underscores our observations. While the research found that 63% of respondents had a “negative outlook” for cross-border investments,” 44% of foreign investors said they planned to increase their property investments in the U.S.

    The area I’ve found has been most impacted has been new development, where I’ve noticed investors exercising heightened caution given the near-term uncertainties surrounding material procurement and labor costs.

    When it comes to capital deployment, key cities in Texas and Florida are positioned to attract investors. Cities in Colorado, Virginia and the Northeast are often highly attractive as well, in my experience. Some multifamily investors seeking higher yields are becoming increasingly open to opportunities in secondary and tertiary markets that are performing well. “Typically, lower-supply secondary and tertiary markets are performing the best, which are located in the Northeast or Midwest,” according to Freddie Mac’s 2025 Multifamily Outlook report. In contrast, I’m noticing some taking a wait-and-see approach with New York, pending the outcome of this fall’s mayoral election.

    I’ve observed interest in U.S. real estate remains stronger from investors in the Middle East, Latin America and Europe. In my experience with Latin American investors, in particular, they tend to target U.S. real estate primarily for diversification purposes. Ultra-high-net-worth individuals and family offices in the region may seek to allocate capital to the U.S. in order to strengthen portfolio stability, gain exposure to U.S. dollar-denominated assets and achieve greater geographic diversity. Moreover, due to ongoing political instability in Latin America, the U.S. may be attractive for investors because of its longstanding political and economic stability. However, as mentioned above, current microeconomic uncertainties and geopolitical challenges have led to a somewhat more cautious approach to investments.

    Lessons For Investors Considering U.S. Opportunities

    Overall, I’m finding that some foreign investors in U.S. real estate are still in a wait-and-see mode regarding short-term developments but maintain strong optimism about the long-term outlook. However, for those seeking opportunities today, several key considerations can help to mitigate risk and position investments for long-term success.

    There are many kinds of risks to prepare for: interest rate risk, currency exchange risk, regulatory risks, supply/demand risks, inflation risk, etc. Real estate is an illiquid investment and should be part of a diversified portfolio for accredited investors.

    To navigate risks, the first critical step for investors is to conduct thorough due diligence. If you’re thinking of partnering with a sponsor, ask if they have successfully navigated multiple market cycles and delivered strong returns. Second, focus on supply-constrained markets and submarkets with robust demand, population growth and expanding job bases. Finally, target well-maintained properties supported by conservative underwriting assumptions on both income and expenses. By keeping these best practices in mind, investors can better position themselves for success in the U.S. market.

    The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.


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