Economists' Outlook

Housing stats and analysis from NAR's research experts.

Foreign Investor Acquisitions of U.S. Commercial Real Estate Increased 49% in 2021

A strong recovery in 2021 in the U.S. commercial real estate market attracted foreign investors who purchased an estimated $57.7 billion in U.S. commercial real estate in 2021, up 49% from 2020, according to NAR's 2022 Commercial Real Estate International Business Trends report.1

In the large capital market where transactions are at least $2.5 million, Real Capital Analytics reported that cross-border capital flows rose 44% to $52.9 billion during the four quarters through 2021 Q3, accounting for 8% of total domestic and cross-border transactions of $638.2 billion. This brings the 2021 cross-border flows back to the pre-pandemic level ($52.6 billion in 2019). Foreign institutional investors (professional, pension, and sovereign funds; banks; insurance companies) drove commercial real estate acquisitions, acquiring $37 billion or 70% of the total $52.9 billion in cross-border flows.

Meanwhile, in the "small" commercial real estate market where approximately 80,000 commercial members of the National Association of REALTORS® mostly do business, NAR estimates that foreign investor acquisitions of commercial real estate facilitated by NAR commercial members more than doubled in 2021, to $4.8 billion from $2.0 billion in 2020. Foreign buyer transactions accounted for 3.1% of the estimated commercial transactions of $155.9 billion among NAR commercial members. In contrast to the ‘large' real estate market, individual investors made up 97% of this market.


While Canadians, Asians, and Europeans were the largest buyers of U.S. commercial real estate valued at $2.5 million or over, the major buyers of NAR's commercial members were from Latin America and Canada. Mexico was the top country of origin (23%). Other Latin American buyers were from Colombia (10%), Argentina (8%), Venezuela (8%) and Brazil (5%). Canada, the second largest foreign buyer of commercial real estate brokered by NAR commercial members, accounted for 13% of transactions.

No respondent reported a buyer from China. In 2020, Chinese buyers were the top foreign buyers of U.S. commercial real estate brokered by NAR commercial members, accounting for 14% of foreign buyers. Transactions with Chinese investors have been stymied by COVID-related travel restrictions.


Florida was the top destination of foreign buyers of U.S. commercial real estate for NAR commercial members, with a 22% share. Texas came in second with a share of 14%, followed by California with a share of 9%. Georgia, New Jersey, and North Carolina each took a 5% share of the market while Arizona accounted for 4%. No respondents reported a foreign buyer buying in New York, even though it accounts for 3% of NAR commercial members' business. On the other hand, New Jersey attracted foreign buyers, accounting for 5% of foreign buyers when that state only accounted for 1.3% of NAR's commercial membership.


Among NAR commercial members, multifamily buildings and land were the preferred property acquisitions of foreign buyers of NAR commercial members. Multifamily buildings accounted for 25% percent of foreign buyer commercial purchases, while land accounted for 21%.


Positive Outlook in 2022 for Most Property Sectors

With the easing of travel restrictions and increasing rates of vaccination and herd immunity, NAR commercial members expect commercial property acquisitions by foreign buyers to increase for most property types except office and hotel properties. They expect the strongest increase in acquisitions for apartment buildings (+3%) and land (+2%). However, they expect a decrease in their office and hotel business transactions with foreign investors.

NAR commercial members reported that the main attraction of the U.S. commercial market is that it is a safe and stable place to do business. It is experiencing strong demand and growth, and cap rates are better than in other markets. There's available inventory and opportunity in commercial properties like turning around Class B retail centers.


1 The 2022 Commercial Real Estate International Business Trends Report discusses the trends in foreign buyer purchases of U.S. commercial real estate in 2021 in the "small commercial real estate market" (sales of below $2.5 million) and in the "large commercial real estate market" (sales of at least $2.5 million). The data on the "large commercial real estate market" is based on Real Capital Analytics cross-border data flows data over a 4-quarter period through 2021 Q3, while data on the "small commercial real estate market" is based on NAR's survey of its approximately 80,000 members whose primary specialization is in commercial real estate or who hold designations from NAR's commercial affiliates, namely, CCIM®, Society of Industrial and Office REALTORS® (SIOR®), REALTORS® Land Institute (RLI®), Institute of Real Estate Management (IREM®), and the Counselors of Real Estate (CRE®).