Why Gulf Sovereign Funds Are Becoming a Force in U.S. Real Estate

• Oil money moves: Sovereign wealth is back in force, reshaping U.S. real estate pricing and power dynamics.

• Platform wars: A brewing antitrust fight could redraw the rules for access inside real estate software platforms.

• Warehouse to wires: Prologis is repositioning industrial land to capture the next wave of data center demand.

• Multifamily outlook webinar: Demand will be steady in 2026, but margins are thinner and execution matters more than ever. Sign up

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Editor’s Pick

Why Gulf Sovereign Funds Are Becoming a Force in U.S. Real Estate

In 2025 the world’s largest sovereign wealth funds reasserted themselves as dominant forces in global capital markets, propelled by huge pools of oil and gas revenues, record market gains and strategic bets on technology and infrastructure. Gulf nation funds from Saudi Arabia, the United Arab Emirates, Qatar, and Kuwait together accounted for more than forty percent of all capital deployed by state-owned investors worldwide, a historic share that dwarfs the activity of traditional public pension and central bank investors. Saudi Arabia’s Public Investment Fund was among the single biggest dealmakers, and Abu Dhabi’s Mubadala ranked near the top globally in transaction volumes.

U.S. real estate has been a primary destination for this sovereign capital, and 2025 saw that trend accelerate. According to data compiled by Global SWF, sovereign and state-linked investors funneled more than $130 billion into U.S. assets, roughly double the prior year’s total and a testament to America’s deep, liquid markets and relatively stable yield profile. Sovereign wealth funds are not just passive allocators looking for yield. They are strategic, patient, and often willing to underwrite long-duration investments that traditional private capital shies away from. Their appetite for logistics, data centers, multifamily housing, and even office conversions helps set pricing benchmarks and liquidity conditions across major markets.

Other sovereign or state-linked funds have been as eager for U.S. real estate exposure. Some funds from Asia and Europe have reduced their American allocations in favor of regional investments or opportunities closer to home, and even within the Gulf there are signs of recalibration. There have been reported cuts to portions of Saudi PIF’s U.S. equity portfolio, hinting at periodic shifts in strategic priorities. Outside of the Middle East, funds like Singapore’s GIC and Norway’s NBIM have long held significant U.S. real estate stakes, though their strategies have varied with global valuations and currency considerations.

The return of sovereign funds to active allocation means deeper pools backing major repositioning plays, especially in sectors tied to secular themes like data infrastructure, life sciences, and logistics. Their scale also changes syndication dynamics, often catalyzing club deals or underwriting structures that bring additional institutional co-investors along. That can tighten cap rates in sought-after markets, raise price floors for core and core-plus assets, and reduce liquidity risk for sellers. Moreover, because sovereign capital tends to have multi-decade horizons, its presence can anchor long-term leases, redevelopment pipelines, and public-private infrastructure initiatives in ways purely domestic capital sometimes cannot.

Of course, the landscape remains dynamic. Shifts in oil prices, geopolitical tensions, and domestic policy debates over foreign investment all have the potential to alter how, when, and where sovereign capital flows. But the sheer scale of assets under management, now at record levels worldwide, and the clear strategic intent behind these Gulf-led allocations suggest that sovereign wealth funds will be major, not marginal, players in shaping U.S. real estate markets for years to come.

Overheard

AppFolio’s Platform Strategy Becomes the Center of an Antitrust Dispute

Property management software provider AppFolio and a third-party compliance platform called Beagle Labs have crossed legal swords in a widening antitrust dispute over access to AppFolio’s system. Beagle’s complaint accuses AppFolio of cutting off its access to the platform under the pretext of “security concerns,” but alleges the real motive was to stifle competition and “steer customers toward its own in-house services.” The filing includes classic monopoly and unfair competition claims, such as “tortious interference with contractual relations,” monopolization and unjust enrichment. Beagle argues that limiting third-party access disrupted its business and limited customer choice.

Beagle’s suit specifically alleges that AppFolio’s actions harmed its business relationships and market presence, and it sought emergency relief through a temporary restraining order to “curb AppFolio’s conduct” while the case unfolds. A federal judge has already transferred the case from the Northern District of California to the Central District and ordered AppFolio to maintain the status quo pending further direction, underlining the seriousness of the dispute at an early stage. Meanwhile, AppFolio has its own legal claims against Beagle, asserting that Beagle made false advertising claims that caused more than 100 customers to breach their terms of service and switch insurance providers.

As real estate software companies increasingly position themselves as ecosystems that bundle services from tenant screening and insurance compliance to AI-powered workflows, disputes over who gets access and on what terms will shape competitive dynamics. If Beagle proves that cutting off APIs or in-platform access constitutes anticompetitive conduct, other third-party vendors and customers who rely on seamless integrations will be watching closely. This case underscores the emerging tension between software platforms that seek to capture more revenue within their own suites and the broader industry’s desire for open, interoperable tools that give property managers choice without exposing them to unfair leverage from a single provider.

Industrial Real Estate Giant Prologis Moves Deeper into Data Centers

Prologis is taking a big step beyond its traditional industrial real estate roots with plans for a large data center campus near Shelbyville, Illinois, that could include up to 13 buildings on roughly 576 acres of rezoned land. The project is part of a broader push by the logistics real estate leader to capture a slice of the booming digital infrastructure market, using both greenfield developments and conversions of existing warehouses into data centers. Prologis executives say these moves are designed to support long-term demand for digital infrastructure that communities and businesses increasingly rely on as computing and cloud services expand. ([turn0search0])

This shift builds on a strategy for the world's largest industrial REIT. Prologis has publicly outlined intentions to scale data center capacity to as much as 10 GW over the next decade, with significant power procurement already secured and more in advanced stages. That push reflects confidence that data center demand will continue to grow, driven not only by traditional hyperscalers but also by the rise of AI workloads that require low-latency, power-dense facilities near population and connectivity hubs. The company’s president has described this expansion as a deepening of its pipeline, and leadership has pointed to its existing portfolio, landbank and capital base as competitive advantages in executing these projects.

Prologis’s move into data centers is not happening in isolation. The company sold a converted Chicago warehouse data center to HMC Capital in late 2024, demonstrating the liquidity that can come from blending logistics and digital infrastructure strategies. Another planned mega campus in Yorkville, Illinois, could span millions of square feet and unfold over decades, showing that Prologis is thinking long term about digital infrastructure land use. The broader industrial real estate sector is also edging in this direction. Partnerships between industrial landlords and data developers, including recent transactions and greenfield sites in Texas, Virginia and beyond, suggest competition for land with power and fiber will intensify.

Prologis’s expanding data center footprint signals a redefinition of industrial land value. Warehouses and distribution facilities once stood alone as the dominant use case for large parcels with strong transportation access. Now those same criteria (proximity to infrastructure, power capacity and digital connectivity) are being blended with requirements for data infrastructure. As data center demand reshapes land markets, communities will be weighing economic development incentives and zoning changes against concerns about energy use and local impacts.

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