When do CFIUS real-estate rules apply to a foreign investor's CRE acquisition?

CFIUS real-estate jurisdiction and how sponsors clear transactions

FIRPTA, REIT, and treaty mechanics are highly fact-specific and change with new IRS guidance. This page is sponsor-POV process commentary, not tax or legal advice. Engage U.S. tax counsel and the foreign investor's home-country tax advisor before structuring any cross-border CRE transaction.

FIRRMA real-estate scope: the Foreign Investment Risk Review Modernization Act of 2018 expanded CFIUS jurisdiction to include foreign acquisitions of certain real property, proximate to specified military installations, airports, and maritime ports, or located within specified geographic areas. Treasury maintains the list of covered sites; check current regulations because the list updates.

Triggering transaction: a foreign person's purchase, lease, or concession of covered real estate can be a covered real estate transaction if it affords at least three of the property rights in 31 CFR 802.233. There is no 30-year lease minimum.

Covered real estate filings under Part 802 are voluntary. Proximity to a military installation, airport, or maritime port does not create a mandatory filing. A Part 800 filing can be mandatory only for a covered investment in a U.S. business.

Mitigation agreements: when CFIUS identifies national-security concerns, mitigation can range from operational restrictions (no surveillance equipment, no rooftop access) to ownership-cap requirements. In limited cases, CFIUS recommends the President block the transaction.

Practical sponsor process: when a foreign investor (especially a foreign-government-affiliated entity) is in the equity stack, perform a geographic CFIUS screen at LOI stage. The screen takes 1 to 2 days for most properties. Where any sensitivity exists, engage CFIUS counsel before signing the purchase contract, voluntary filings take 30 to 45 days standard, with extensions possible.

Lender perspective: senior lenders typically require representations that the foreign investor is not subject to a CFIUS mitigation agreement that would interfere with the lender's collateral rights. Bridge debt funds are usually receptive to CFIUS-cleared structures; some banks require CFIUS counsel sign-off as a closing condition.