U.S. investors generally allocate the majority of the commercial real estate investment capital toward investments within the United States. And when they do invest overseas, they often focus on higher-return investments, with less interest in non-U.S. core properties. There are other advantages for a global real estate portfolio, such as the security that comes from a diversified investment approach. But there also are risks, as overseas investments bring investors into contact with different regulatory regimes and currencies.
Given the size of their home market, it may be no surprise U.S.-based institutional investors typically prefer to invest domestically. And that trend was intensified in the post-pandemic era, as the high cost of capital has made accessing international markets even more challenging.
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