What the U.S. and UK reveal about investing through geopolitical and economic uncertainty

Real estate has always been local. Capital increasingly is not. From interest rates and energy prices to geopolitical events and construction costs, global forces are reshaping investment conditions on both sides of the Atlantic. Yet their effects are not uniform. The same macroeconomic environment can produce very different outcomes depending on local supply, demand, capital structure and property fundamentals.

The United States and United Kingdom illustrate that divergence particularly well. Both are deep, sophisticated real estate markets. Both attract substantial domestic and international capital. Both are navigating elevated borrowing costs and geopolitical uncertainty.

But the opportunities—and the risks—are increasingly different.

The global macro environment may be shared. Its real estate consequences are not.

Capital Is Moving, But Becoming More Selective

Uncertainty has not stopped capital from moving.

In the U.S., commercial real estate has remained more resilient than many anticipated.

CBRE projects approximately $605 billion of investment activity in 2026, a 16% year-over-year increase, even after revising its outlook to account for geopolitical disruption and higher interest rates.

The UK presents a different picture. Investment volume totaled approximately £23 billion during the first half of 2026, down 8% from the prior year, although living and office investment each increased 7%. The distinction between prime and secondary assets has also continued to widen.

Cross-border capital remains significant. Foreign and domestic investors each represented approximately half of UK commercial real estate investment during the first half of 2026, with North American investors the largest source of foreign capital. That tells us something important.

Capital has not disappeared. It has become more selective about where it goes and what risks it is willing to accept.

For investors operating across markets, relative value therefore matters increasingly. Financing costs, currency exposure, hedging, replacement costs, supply pipelines and property-level fundamentals can materially change the attractiveness of an investment even when two markets face the same global economic backdrop.

Underwrite the Interaction, Not Just the Variables

The challenge for investors is no longer simply forecasting interest rates, rent growth or cap rates independently.

It is understanding how those variables interact.

Higher interest rates can pressure asset values while reducing future supply. Higher construction costs can hurt development economics while increasing replacement-cost protection for existing properties. Slower economic growth can weaken demand while simultaneously reducing the pipeline of competing assets.

Geopolitical events can travel even further through the investment equation: energy prices influence inflation, inflation influences monetary policy and bond yields, yields influence financing costs and financing costs ultimately influence property values and development decisions. The Bank of England's latest financial-stability assessment illustrates precisely this transmission from geopolitical disruption through commodity markets and financial conditions.

For cross-border investors, another layer is added: currency movements and hedging costs can change relative returns without anything changing at the underlying property.

This is why macroeconomic forecasts alone are insufficient.

Global trends set the backdrop. Local fundamentals determine the outcome.

Investing When the Signals Conflict

Uncertainty should not automatically be confused with weak fundamentals. The U.S. and UK both contain markets and sectors with durable demand, constrained supply and significant investor interest. They also contain assets whose economics remain challenged.

Distinguishing between them requires disciplined underwriting: understanding basis, leverage, competitive supply, operating performance and the durability of demand rather than relying on broad narratives about a city, sector or economy. The objective is not to wait until every signal turns positive. By then, pricing may already reflect it.

Instead, investors must determine which risks are temporary, which are structural, and whether the expected return adequately compensates for both.

The world may be increasingly interconnected.

Real estate remains intensely local.

And the opportunity lies in understanding where global forces meet local fundamentals and where the resulting risk is being mispriced.