Europe’s deep institutional pockets have long played a quiet but meaningful role in American real estate markets, and for years they helped fuel liquidity and pricing across offices, multifamily, logistics, and more. Pension giants from Scandinavia and the Netherlands, insurance-linked funds from Germany and Switzerland, and specialist allocators with tens or hundreds of billions under management have been part of the global capital mix that underwrites trophy buildings and stabilizes private-market valuations.

Thanks to escalating tensions between the U.S. and Europe over Greenland, the best-known Danish pension fund recently announced a full exit from its modest U.S. Treasury holdings, a symbolic repudiation of what were once seen as unassailable safe-haven assets. This move signaled deeper unease about U.S. fiscal stability and geopolitical risk. AkademikerPension, which manages around $25 billion, plans to liquidate roughly $100 million of Treasuries by the end of January 2026, explicitly citing concerns over the U.S. government’s finances and its long-term credit outlook. The move, though small in dollar terms, reflects a strategic shift among at least some European investors reassessing the risk–reward of American exposure.

That sell-off of government bonds may seem trivial against the roughly $30 trillion U.S. Treasury market, but it sits atop a broader pattern of European capital recalibrating its relationship with U.S. assets. Larger pension funds across Denmark have trimmed Treasuries or paused new U.S. commitments, with some shifting allocation to euro-area bonds and local markets to reduce perceived sovereign risk and currency hedging costs. Smaller reallocations away from U.S. equities by Nordic insurers and pension investors earlier in 2025 show a consistent theme: capital weighing geography along political and macro lines, not just fundamentals. Outside government debt, European funds have taken a harder look at U.S. real estate exposure. For example, PFA, Denmark’s largest pension fund with roughly €96 billion under management, has been trimming foreign property holdings and tilting its real-estate portfolio toward domestic markets and residential assets, with a plan to reduce international exposure to about one-third of its real estate allocation by the end of 2027.

This reassessment isn’t limited to the Nordics. Germany’s Bayerische Versorgungskammer, one of Europe’s largest public pension groups, recently flagged potential additional loss risk of up to €690 million stemming from U.S. real estate development and refurbishment projects, prompting strategic adjustments and signaling how foreign investors are more critically evaluating project risk and execution in an era of higher costs and rising financing spreads. Collectively, these moves reflect a more nuanced European posture toward U.S. property: not an abrupt exit but a greater selectivity that prizes local knowledge, political clarity, and risk management over broad exposure.

For U.S. markets that have leaned on the depth of global capital, this shift forces a reckoning with how international capital allocates during uncertain political climates. European funds have long been active in gateway markets and core assets, contributing not just capital but price support and countercyclical stability. Institutions tied to massive pension systems and insurance pools typically move slowly, but when they adjust their risk models, it reverberates across U.S. borrowing costs, pricing assumptions, and cross-border deal structures.

This is not a unilateral withdrawal from U.S. real estate or a dramatic “capital strike.” Many European institutions maintain substantial positions in U.S. equities, corporate credit and, in some cases, privately held property vehicles. But tipping points in how they view sovereign risk, monetary policy consistency, and political stability could push more capital toward Europe’s own markets, especially as cities like London, Paris, and Munich see renewed investor interest and rising transaction volumes. For U.S. owners and operators, the key takeaway isn’t that European money is suddenly gone, it’s that it is becoming more discriminating, less passive, and more sensitive to macro and political factors that go well beyond real estate fundamentals.

By reshaping the cost of capital and the competitive landscape for core assets, these broader shifts may ultimately affect pricing across markets. As cross-border allocation becomes increasingly tactical, U.S. real estate may find that the days of European capital as a stable backdrop to every cycle are giving way to a more conditional and strategic engagement.

Fifth Wall, long the poster child for real-estate venture capital with about $3 billion in capital under management, just hit an inflection point: staff cuts and a halt to active fundraising. That marks a stark pivot from a firm that once raised record-breaking real estate and climate tech funds and assembled a roster of more than 110 strategic limited partners and 150 portfolio companies tied to the built world.

The roots of this shift trace back to the broader “PropTech winter” that followed years of elevated interest rates and a contraction in venture capital flows. That downturn wiped out or strained a host of tech-driven companies, from construction-tech failures like Katerra to homebuying upstarts such as Reali and lodging operators like Zeus Living. Fifth Wall did have many successful exits, including ServiceTitan, which went public at a roughly $9 billion valuation, and an early investment in Industrious before its acquisition by CBRE. But those wins sit alongside bets in an ecosystem that’s proved unpredictable.

For a firm that helped define PropTech as an asset class and commanded one of the largest pools of real estate aligned venture capital, this retrenchment shows how hard the PropTech landscape can be. Capital appetites can shift when market conditions tighten and real world adoption tends to lag venture expectations. Fifth Wall’s pause on fundraising and reduction in headcount might just be a temporary retooling. How it redeploys its dry powder and refines its investment criteria will shape how investors, founders, and corporate partners view PropTech’s next phase. This latest development shows that even the best connected and funded investors can struggle in the glacially slow pace of real estate tech adoption.

Prologis reported a strong fourth quarter in its earnings call yesterday, handily beating earnings expectations while posting revenue slightly above forecasts. The company ended the year with occupancy above 95 percent and a net effective rent change nearing 44 percent, signaling that demand for logistics space remains unusually robust even as broader industrial markets adjust to post-pandemic normalcy.

Management highlighted record leasing activity, with 228 million square feet signed during 2025, reflecting a pickup in long-term commitment from customers and improving absorption trends. That leasing strength comes alongside Prologis’ efforts to expand out of pure warehouse space into adjacent infrastructure, particularly data centers and enhanced power capacity to support digital tenants, a move that mirrors how logistics real estate is blending with tech-driven requirements.

Prologis' size makes it a bellwether for the rest of the warehouse real estate industry. Its earnings call suggests that there is still plenty of opportunity as occupier sentiment shifts. High occupancy and visible rent growth imply that the slump in logistics rents seen in 2024 is giving way to a more constructive environment, especially for newer, well-located facilities, even as overall vacancy remains above historical lows. Prologis’ 2026 guidance, which calls for continued leasing momentum, underscores that e-commerce, while plateauing, still has plenty of room to run.

Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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