Foreign Capital Sharpens CRE Investment Approach

Foreign Capital Adopts Targeted Strategy

Foreign capital is making a notable return to US commercial real estate in 2026, according to Globe St. Global investors are shifting away from broad, thematic plays and moving toward targeted investments that emphasize strong fundamentals, specific basis points, and resilient micro-markets.

Industry leaders from AFIRE and Zurich expect higher deployment volumes this year, with cross-border money flowing into carefully selected assets, signaling a shift from the speculative environment seen in previous cycles.

Data Centers and Housing Remain Top Draws

Investment momentum is strongest in data centers and housing. Foreign capital is responding to the ongoing demand for digital infrastructure and specialized residential, while taking a selective approach to traditional office and retail assets.

Significant deals—particularly from Canadian and Asian investors—highlight the appeal of these sectors, with data center pricing reaching new highs amid increased adoption of AI and energy demand. In housing, investors favor segments like apartments, student, and senior living, especially as regulatory barriers ease in key cities.

Emphasis on Basis and Micro-Markets

Investors are now prioritizing entry basis and underwriteable cash flows in distinct submarkets, rather than chasing headline yields. The discipline is evident in Zurich’s focus on core asset types across just 20 US markets and in deal sizes between $20M and $125M.

Lending has rebounded for stabilized, low-volatility properties, especially trophy offices in select nodes. Portfolio allocations increasingly weigh CRE against other asset classes, reflecting a new sensitivity to risk and macroeconomic factors. This more calculated posture follows a period of sharp pullback in foreign capital, when cross-border investment had dropped to levels not seen since 2011.

Political Risk and Market Expansion

Political volatility, currency fluctuations, and trade policy continue to factor into foreign capital’s CRE calculus, but the US is still seen as a safe haven. Interest remains robust from Asia, Australia, and Canada, with some caution among European investors.

Geographically, the focus is widening from gateway cities to high-growth secondary markets and specific neighborhoods—reflecting a “stock-picker’s market.” Inside cities, logistics tied to manufacturing reshoring and select mixed-use locations offer further opportunities. The era of buying any marquee asset has shifted to a disciplined search for sustainable returns in tightly defined locations.