U.S. Treasury Expands CFIUS Oversight on Real Estate Near Military Sites

Treasury's Final Rule Enhancing CFIUS Oversight on Real Estate

On November 3, 2025, the U.S. Treasury issued a crucial final rule that significantly expands the Committee on Foreign Investment in the United States (CFIUS) jurisdiction over real estate transactions near military installations. This new rule comes into effect on December 9, 2024, and introduces added scrutiny to over 60 military installations, explicitly targeting foreign buyers and developers. As reported by Phillips Lytle LLP, this expansion reflects mounting concerns over national security threats posed by foreign investments in sensitive U.S. areas. The rule adds 40 installations to the one-mile review radius and another 19 to the 100-mile radius, impacting foreign investment flows and raising compliance costs.

Extended Jurisdiction Includes 59 New Sites

The final rule updates CFIUS regulations to include 59 additional military installations, enhancing its jurisdiction over specific foreign real estate transactions. According to Jones Day, this significant increase brings the total number of sites under CFIUS review to approximately 250, further safeguarding against potential foreign surveillance and intelligence-gathering activities. The updated list of installations now includes Space Force bases, highlighting a proactive approach to evolving national security challenges.

CFIUS jurisdiction now covers approximately 250 military installations.

Regional Impact of CFIUS Rule on Real Estate Investments

The expansion of CFIUS oversight will particularly affect real estate markets in regions close to the newly listed military installations. Areas near the additional 40 installations included in the one-mile proximity list are likely to see heightened compliance requirements. For instance, transactions near bases like Warren Air Force Base in Wyoming, which was previously identified for its vulnerability to foreign acquisition threats, will now fall under CFIUS jurisdiction as highlighted by DLA Piper. This could lead to reduced foreign investment interest in these strategic areas.

Compliance Costs and Challenges for Foreign Investors

Foreign investors and developers aiming to invest in U.S. real estate near sensitive military sites now face increased compliance costs. The requirement to undergo CFIUS review can introduce substantial delays and legal costs as transactions are scrutinized for potential national security implications. According to Hogan Lovells, non-compliance with CFIUS measures could result in penalties up to the full value of the transaction or $250,000 per violation. This has added a layer of complexity and deterrence for international real estate investors.

Stakeholder Perspectives: Balancing Security and Investment

Stakeholders have expressed mixed reactions to the treasury's expanded CFIUS oversight. While national security advocates support the measure as necessary for protecting sensitive sites from foreign surveillance, real estate developers and foreign investors express concerns about the potentially stifling effect on foreign investment. Maya Tarek, Senior Analyst at RealEstateAbroad.com, notes, "The rule balances the need for security with economic growth. However, it could discourage some foreign investors due to increased regulatory hurdles." The rule's impact is expected to be especially pronounced for developers seeking to engage in projects near the newly designated installations.

Future Implications for U.S. Real Estate Market

Looking ahead, the expansion of CFIUS oversight may serve as a precedent for further tightening of foreign investment regulations in other sensitive areas. RealEstateAbroad.com analysis suggests that while the rule aims to enhance national security, it could also lead to a slowdown in foreign investment flows into the U.S. real estate market, particularly in regions deemed vulnerable. Investors may need to adapt their strategies, focusing on areas beyond the restricted zones or seeking partnerships with U.S. entities to mitigate regulatory risks.