The U.S. dollar has weakened in recent months compared to other major currencies, which in theory might pose a U.S. commercial property buying opportunity for non-American investors whose home currencies are stronger.

The outlook for foreign investment in domestic commercial real estate is a little more complicated. Foreign investors are skittish about the U.S. economy and how CRE is going to perform as long as the coronavirus pandemic continues, with foreign investor sentiment about U.S. properties firmly in negative territory, according to the Q2 2020 AFIRE/RICS Americas Commercial Property Survey.

The survey queried more than 2,000 non-American investors, including about 500 in the UK, as well as responses from Europe, Asia, the Americas and other places, in late June and early July. Respondents were asked to compare U.S. market conditions over the latest three months compared with the previous three months and offer their opinion on the outlook for U.S. property markets.

On the whole, overseas investors foresee rents and capital values falling in the year ahead, though the industrial sector might defy those trends, according to the survey. The retail and hotel sectors are expected to continue taking a beating, and office isn't expected to do well either. Little change is expected for data centers or multifamily properties.

U.S. real estate is likely to perform better in a weak dollar environment, investment adviser Joseph Calhoun writes in Seeking Alpha. But for the moment, CRE fundamentals, which are weak in a number of sectors (retail and hotel), are overshadowing how the dollar is trending.

Even so, non-American investors who can overcome their skittishness, or perhaps long-time investors familiar with the nuances of U.S. CRE markets, stand to benefit from the favorable exchange rates. That is the case especially compared with the beginning of the pandemic, when there was a brief flight to the dollar.

At the beginning of the pandemic (March 22), $1 traded for 0.94 euros. Now it is trading for 0.84 euros. Also on March 22, the dollar traded for 0.86 pounds sterling; now it buys only 0.76 pounds. At the beginning of the pandemic, $1 bought about 110 Japanese yen. Now it buys about 105 yen.

Also, the price of insuring against currency fluctuations has fallen dramatically since the Federal Reserve cut interest rates in the early days of the pandemic, Real Estate Alert reports.

The effect is “to literally make the U.S. on sale today ... compared to where it was a few years ago,” CBRE Chairman of America Research Spencer Levy told REA, though travel restrictions can make overseas investing more complicated than usual.

While investment in the United States itself is floundering because of poor control of the pandemic, countries with currencies pegged to the U.S. dollar are now seeing an influx of CRE investment.

The United Arab Emirates' currency, for instance, is the UAE dirham, which has been pegged to the U.S. dollar since 1973 and currently trades at $1 to 3.6725 AED. As the dollar goes, so goes the AED. There has been a surge in property sales in Dubai, particularly from overseas investors who are buying with more valuable euros and pounds, Construction Business News Reports.

"Development projects in Dubai have, in effect, become 14.8% and 11.2% cheaper depending on whether you are buying in euros or sterling," Devmark CEO Sean McCauley told CBN. Devmark is a UAE-based real estate consulting and advisory firm.