By Mark Luijcks, Client Relationship Director, Netherlands
Europe is emerging as a key destination for U.S.-based commercial real estate (CRE) investors.
According to CBRE’s European Real Estate Market Outlook, relatively low borrowing costs and a favourable euro-dollar exchange rate are attracting significant international capital. Anchored by stable institutions and attractive financing conditions, Europe’s CRE market is positioning itself as a compelling alternative for American investors in search of diversification and risk mitigation. This shift represents a strategic response to both domestic volatility and European market opportunities.
Why Europe is so appealing to U.S. investors
Many large U.S.-based private equity real estate (PERE) fund managers have begun actively targeting Europe for new investments, driven by several compelling factors:
- Macroeconomic stability and market resilience: Savills forecasts a 13% rise in European investment volumes in 2025, reaching a 25% gain in 2026. Amid significant stock market volatility, CRE’s resilience sets it apart from other asset classes
- Favourable interest rate environment: The European Central Bank (ECB) has signalled further rate cuts in 2025, with long-term Eurozone borrowing costs remaining below U.S. levels
- Regulatory and political calm: Europe’s multi-party parliamentary systems offer steady governance; a notable contrast to the increasingly volatile political landscape in the U.S.
- Stronger diversification: CRE investments in Europe offer a straightforward path to diversifying portfolios that are currently focused on U.S. markets
- Structural demand: Europe’s senior housing, student housing and data centres are drawing increasing interest thanks to demographic and sustainability trends
Navigating the European investment landscape
Despite its significant upside, the European market presents complexity for U.S. funds without overseas experience. Funds must contend with:
- A complex regulatory landscape: Funds must navigate AIFMD requirements, local entity structures, AML/KYC protocols and potential tax implications across multiple jurisdictions
- The need for local market infrastructure: Effective entry requires both capital and extensive back-office support, including corporate secretarial, local directors, depositary oversight, and tax/legal coordination
- Multi-jurisdictional structuring: Share-based CRE acquisitions are typical, which necessitates local entities and financial reporting aligned with jurisdiction-specific regimes
How IQ-EQ can help
We provide a full-service bridge between U.S. capital and European CRE, including support for both LPs and GPs:
- Third-party AIFM
- Full fund administration and depositary services
- KYC/CDD and investor reporting
- Cash flow management
- SPV and property holding company set-up and administration
- Corporate secretarial, domiciliation and local directorships
- Regulatory filings, governance and board services
- Accounting, annual audits and statutory filings
Our team of European specialists works closely with U.S. fund managers to navigate regulatory requirements and operational complexities across the region. With established local infrastructure and regulatory expertise, we enable seamless capital deployment while ensuring compliance with evolving European standards.
To learn more about how we can support your European CRE investment strategy, please reach out to our team.
