The role of
foreign capital in the US commercial real estate market has evolved substantially over the past two decades. Attracted by the growth of the nation’s economy, foreign buyers have taken on a growing role in the US real estate market.
In decades past, domestic buyers would have viewed a significant influx of foreign capital as a growing risk. The reality
of today, however, is that foreign capital is far more likely to
be a source of stability and liquidity, and foreign investors are
far savvier than in the past. How this came to be, and what it
means for the future of US real estate, is an issue worth examining in depth. n Before discussing the role of foreign buyers in the US today and in the future, it’s important to remember that the nation’s shores have not always been welcoming.
In 1980, the US Congress passed the Foreign Investment in
Real Property Act (FIRPTA). The goal of FIRPTA was to increase
the taxes foreign buyers paid when disposing of commercial
real estate assets. The size and nature of these tax burdens
had their intended effect: the attractiveness of US real estate