Global Capital Outlook
International Investment Shifts to Industrial Assets, Smaller Markets;
Canada Leads Other Nations in U.S. Acquisitions
Cross-border property investment overcomes pandemic challenges. The onset of the global health crisis raised concerns that international investment into U.S. commercial real estate would be significantly waylaid by travel restrictions and other precautions. While the amount of capital crossing from abroad did decline during the pandemic, overall acquisition activity fell more steeply, resulting in a higher ratio of foreign investment. The share of global capital invested in domestic commercial properties rose from 8.7 percent in 2019 to 9.2 percent for the trailing-12-month period ending in March 2021. An active closing quarter to 2020, where 11.2 percent of capital came from outside the country, compensated for a slower spring and summer when that ratio fell to as low as 4.8 percent. Although below the high of 17.6 percent set in 2015, international investment into domestic real estate aligns closely with the 10 percent average recorded over the past two decades. That ratio may climb in the near future as barriers to overseas travel continue to fall and the broader global economy recovers.