RCA Insights

Chart: Shifting Preferences of Cross-Border Investors in US

By on November 24th, 2021

Cross-border investors in U.S. commercial real estate held a steady share of the market through the worst of the pandemic as both domestic spending and cross-border spending dropped. However, during the crisis the preferences of overseas capital have changed.

Before Covid-19 erupted, cross-border investors favored investments in the 6 Major Metros such as New York and Boston. As shown in the chart on the left, since the crisis arose this investor group has leaned more to the Non-Major Metros, which may help liquidity and in turn price growth in these areas. In the four quarters through Q3 2021, the Non-Major Metros garnered 63% of cross-border acquisition capital, up from an average of 46% in the years 2015 to 2019.

Looking at the office sector alone, which was historically a key target of overseas buyers, there has been a shift from downtown office towers to suburban assets, as shown in the chart on the right. During 2015-19, suburban office properties represented 30% of total cross-border investment in the office sector. In the four quarters through Q3 2021, this share was 47%.

charts comparing cross-border acquisitions in US metro types and office subtypes

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Clients of RCA can download the Q3 2021 US Cross-Border Investment Compendium data supplement from the RCA website. Not yet an RCA client? Contact us to learn how RCA reports, tools and analysis can help inform your investment decisions.

Michael Savino

Senior Associate, MSCI Research
michael.savino@msci.com

Michael works in MSCI’s real estate research team and is based in New York. He focuses on commercial real estate capital flows and pricing indices. Michael joined MSCI through its acquisition of Real Capital Analytics, where he began his career in 2017. He holds a bachelor’s degree from Tulane University.