Need-to-Knows About Today's Global Commercial Real Estate Market

Across the world, every country and industry has been impacted by the COVID-19 pandemic. How have cross-border commercial real estate investments performed, and where are the best opportunities looking forward?

Here is a summary of several key facts regarding today’s commercial real estate (CRE) market to help global agents stay on top of recent developments.

Who is Investing in the US?

China dominated foreign investment in US properties, both residential and commercial, in the years leading up to the Trump administration. But China’s participation in foreign investments plunged dramatically, even before the pandemic emerged.

According to Real Capital Analytics, Chinese investment in US commercial real estate peaked in 2016, at $19.1 billion. By 2019, investments had slipped to $800 million. In 2020, China fell short of the top 10 list for the second year in a row.

Canada stepped firmly into the top spot with China’s departure, even though its investment in US CRE declined 10% between 2019 and 2020, from $13.8 billion to $12.4 billion. Total investments by the United States’ neighbor to the north were more than double any other country.

South Korea’s appetite for cross-border investing remained strong in 2020, but it redirected much of its foreign CRE investments from Europe to the US. With an 88% increase in US acquisitions, South Korea leaped into the number two spot, at $5.2 billion.

With $2.4 billion in investments, South Korea’s National Pension Service represented the bulk of Korea’s purchases last year. Recent acquisitions included stakes in a 14.3 million-square-foot industrial portfolio (with Stockbridge Capital Group) and the One Madison office development in Manhattan.


Germany slid to number three in 2020. Its total US deal volume fell by nearly one-third to $4 billion.

Overall, the US market for inbound commercial investments in 2021 appears strong. Even though the pandemic brought 2020 deals to a screeching halt, analysts see substantial pent-up demand and are optimistic that markets will rebound as vaccines roll out.

Bar chart: Top 10 Sources of Cross-Border Investment in U.S. Commercial Real Estate

Segments: What’s Hot, What’s Not?

The pandemic’s disruptive impact substantially altered the commercial real estate landscape, dealing both winning and losing hands to various property segments in the US and beyond.

Industrial real estate, health care, and data centers were among the winners. In contrast, offices, hotels, and multi-family properties suffered.


Ever since the pandemic sparked a worldwide experiment in remote work, companies have been scrambling to determine the size, location, and configuration of their office requirements.

When NAR asked its commercial members about the pandemic’s impacts late last year, the top four issues related to office spaces; other office-related impacts also appeared further down the top 10 list.

Jones Lang LaSalle (JLL) expects most offices to reach 80% capacity by December 2021. But owners and operators will need to support companies’ efforts to provide office models that keep employees healthy and happy.

After all, remote work has become a way of life, and it’s unclear how employees will respond to a call to return to the office. An early-March 2021 survey by the Milken Institute and Infosys found that 80% of US workers are very or somewhat satisfied with remote work, even with heavier workloads.1

Top Impacts of COVID-19 on US Commercial Real Estate

What changes are you seeing relative to January 2020 (pre-coronavirus condition)?

Percentage of respondents who answered "more" in Q4 2020 – top 10 responses

Table: Top Impacts of COVID-19 on U.S. Commercial Real Estate


E-commerce deliveries have been driving up demand for suburban warehouse facilities with convenient access to highways. According to Green Street, US industrial property values were up 8% in the nine months following the pandemic.

Foreign investors who previously displayed a penchant for high-profile projects in familiar US travel destinations are rethinking their priorities and jumping on the industrial property bandwagon.

The logic goes like this: An investment in an Amazon warehouse located in an unknown secondary market is comparable to investing in corporate debt issued by one of the world’s largest companies.

In the decade leading up to the pandemic, institutional investors from South Korea favored office properties. In 2020, more than half of all investment from South Korea shifted to industrial real estate.

As already noted, the National Pension Service of Korea participated in a significant deal that involved 23 US warehouses. Other recent cross-border industrial investments include:

  • $875 million in 27 US logistics facilities by a subsidiary of France’s AXA Investment Managers
  • 49% stake in a 19-property US industrial portfolio by Germany’s Allianz Real Estate (with Crow Holdings)

On the rebound?

It’s unclear whether demand for travel and conventions will return any time soon. But that isn’t stopping some investors from purchasing hospitality properties at beaten-down prices and betting on their long-term potential.

For example, the real estate arm of Koch Industries recently purchased one of the oldest and largest unfinished projects in the US—a 63-story Las Vegas hotel, condo, and casino tower started in 2007 for roughly $350 million.

Condo developments in New York, Chicago, San Francisco, and other urban centers also took a beating during the pandemic but may be ripe for a rebound.

For instance, the Wall Street Journal reports that Manhattan developers are arranging behind-the-scenes bulk sales at steep discounts to investors, while new condo sales contracts rose 21% in January and December versus the same months one year ago.

Global CRE Performance

According to CBRE, total global commercial deal volume was off 26% in 2020. However, volume surged 84% in the fourth quarter, signaling a strong recovery in investor sentiment.

Notable findings from CBRE’s report include2:

  • The late-2020 surge was led by the Americas, especially the US, which saw a 97% quarterly increase
  • Multi-family and industrial properties represented 62% of transactions, compared to 53% in 2019
  • European markets suffered the smallest declines in 2020, with deal volume off 17%

Looking forward, CBRE sees a positive economic outlook for most economies, with global CRE investment expected to normalize in 2021, especially in the second half of the year.

1 Future of Work: Insights for 2021 and Beyond

2 CBRE Global MarketFlash, February 1, 2021


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Global Perspectives in Real Estate is a resource for global professionals, aimed at helping them globalize their local markets. Produced bi-monthly, this newsletter serves as a how-to guide and is full of useful and actionable tips. A free subscription is given to all Certified International Property Specialists (CIPS) designees.

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