Foreign Capital Spooked From Investing In U.S.

Western European investors are shying away from buying American as trust in the Trump administration erodes.

Coro Realty Advisors President Robert Fransen told Bisnow the fear of investing in the U.S. is sweeping across Europe.

All but 10% of the commitments from Swiss, German and Dutch investors for a real estate deal the firm was sourcing two months ago have now pulled back, Fransen said. 

“European investors finally have had enough,” he said via email.

“The combination of the Powell ‘investigation,’ posture toward Greenland, tariffs, and general weaponization of the US economy have become too much for them. The spigot from most of Western Europe is almost closed. It is a combination of geopolitical concerns and national pride.”

Jamestown Chief Financial Officer Chris Kopecky said money from Western Europe “is completely shut off right now” as President Donald Trump ups the rhetoric on taking over Greenland and continues his aggressive tariff campaign. 

Jamestown controls more than $14B in assets under management and has largely sourced investor capital from Europe, especially Germany. With those players shunning U.S. commercial real estate, Jamestown has been forced to pivot to other countries, Kopecky said during Bisnow’s Atlanta CRE market kickoff event Wednesday at The Georgian Terrace. 

“I would say, right now, I think deploying capital in the U.S. is difficult, and so we actually turned our focus to deploying in Europe,” Kopecky said.

He added later that the distaste for U.S. CRE assets by foreign investors stems from political uncertainty and “goes back to just the worldview [of the] administration.”

The comments come amid mounting tensions between the Trump administration and many NATO allies, especially Denmark, which controls the island nation of Greenland. Trump has repeatedly called on Denmark to cede Greenland to the U.S., which has been met by broad international condemnation. In Davos, Switzerland, on Wednesday, Trump said he would not take Greenland by force but increased the pressure for immediate talks on the U.S. buying it.

Greenland is just one headwind deterring foreign capital from the U.S.

Concerns about the independence of the Federal Reserve Bank as Trump calls to replace Chairman Jerome Powell and the Supreme Court hears a case to determine if the president has the right to fire Governor Lisa Cook have prompted a host of Danish pension funds to reduce holdings of U.S. Treasuries, IPE reported Wednesday.

Kopecky said he saw attitudes shift about U.S. investing shortly after Liberation Day, when Trump levied a blanket 10% tariff on UK imports. Soon after that day in April, Kopecky met with two European institutional investors in New York, one of whom said the firm would not invest in the U.S. and China. The other offered a sobering prognostication of current events: China would take Taiwan, Russia would win Ukraine and the U.S. would take over Greenland while the rest of the world made the euro the global reserve currency.

Kopecky said he is hearing fears that the U.S. will ultimately not hold midterm elections because of the Trump administration. And while it is hard to imagine that coming to pass, the mere fact that concern is growing is impacting decision-making.

“The perspective from the other side, back to the U.S., is way more profound than I think anybody realizes,” he said. “The world view of the U.S. is not the stable view that it has been.”

And while European leaders have historically preferred U.S. presidents from the Democratic party, the concern over Trump transcends feelings about Republican leaders, Fransen said.

“An investor told me on Sunday, ‘Trump's actions make investing in the U.S. very dangerous for us Europeans. Here, all the traffic lights turned bright red,’” Fransen said.

Panelists at the Wednesday event were not all doom and gloom, noting that the CRE market has picked back up with increases in both industrial and office leasing activity. And banks have returned to the lending scene, with SJC Ventures principal Jeff Garrison saying the firm closed four loans with banks last year. 

“I do think we will have some macro surprises this year, right? I don't think you can ignore those entirely,” Portman Holdings Chief Development Officer Travis Garland said. “But I think people are now primed to say, overall, there is some good news still from the macro perspective.”