Geopolitical events shape investment flows and capital returns across our global commercial real estate markets. Most global real estate transactions are by domestic investors, but cross-border capital flows, where the capital source is not the same country as the asset purchased, are also significant drivers of activity. Cross-border capital has pulled back from investment activity in the United States because of tariff-related and geopolitical concerns. Because the United States is the largest commercial real estate market, accounting for 38 percent of global transaction activity in the past 10 years, we examine the potential implications if capital flows are reallocated away from the United States, both on US market activity and on other potential targets for real estate investors.

International real estate capital flows are heavily pro-cyclical

Using data from MSCI Real Capital Analytics, we see the volume of overall global commercial real estate t