Global investment trends and cross-border capital flows

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Marion Jones: Hi, my name is Marion Jones. I'm executive managing director of U.S. Capital Markets at Avison Young, and I'm sitting here with my colleague and counterpart in the U.K., Chris Pilgrim. Chris, welcome to D.C. Thank you for being here today. I'm so excited to sit here with you.

Chris Pilgrim: Thank you Marion. We've just had a great time in New York, and it's brilliant now to be in D.C.

Let’s set the stage and take a look into the U.K.

Jones: I'm so glad that we've had the opportunity to trade notes on investment themes and cross-border capital flows since you've been here, and I thought maybe you could kick us off in our conversation with sort of a general state-of-affairs as it relates to cross-border capital flows. And maybe you could touch a little bit about what's happening in London in the U.K.

Pilgrim: Yeah, sure. Look, I think, you know, we've been in that environment where cross-border capital has been slightly more limited over the last few years. And I think that's a global trend we've seen. But I think, you know, we both are very fortunate. We sit in two markets, the U.S. and the U.K., which are the two biggest recipients of international capital right now. And, you know, we're seeing that again, a lot of U.S. private equity money is coming into the U.K. at the moment, which has been really fantastic. But we're also seeing a little bit of resurgence from, capital from Asia Pacific as well, in particular from the Japanese but also from some of the Singaporean funds as well.

Jones: Can you maybe elucidate the office sector in particular? Because it seems to be a large recipient of cross-border investment into the U.K.? And to what extent is that kind of buoying the investment market for office in the U.K.? It's just always very interesting for me to draw parallels to where we are in the U.S.

Pilgrim: Look, it's a great question. And, you know, in some respects the office investment market has been more challenging in terms of where capital has been able to deploy. We're really turning that cycle now. I think we're seeing that certainly in London and, I think we've been picking up here as well. There's definitely now far more interest coming back into the office sector.

But what I think is really interesting as well from a capital perspective, and we see this definitely in the U.K., there's just more diversification in terms of the way investors want to deploy their capital. So we're also seeing that going into the student housing market. Logistics are still really strong, but it's really nice to be able to say that we're back to a point where office is now back on the on the agenda.

You know, so Marion, we're here in D.C. at the moment and I think one of the things that always really strikes me as interesting in the States is just the depth of domestic capital you guys have here. And I think as we look into 2026, what are you seeing that capital is going to do both from a market and from an asset class perspective?

Let’s shift focus to take a look into the U.S.

Jones: So you know, in 2025, transactional volume across the United States is up 19% year over year. I think the big story for 2025 in the U.S. has been the dramatic improvement in debt liquidity, not just in terms of transactional volume, which by the first half of this year had just about almost eclipsed the year total for 2024, in terms of debt volume and originations. That's a really healthy sign.

One of the big stories of 2025 is that the debt market has really shown a lot of strength. And that has buoyed transactional volume.

Let’s talk trends and what we can expect in 2026

Jones: I would say where we are still maybe a little constrained is in the LP space. And we do see the institutions beginning to dip their toes back in the water from an acquisition standpoint. And I think we'll see more of that going into 2026.

Jones: I think we will see a little bit more momentum in the LP equity space. Certainly, the market would really benefit from LPs coming back into the multifamily sector which has been hit by three things, which is obviously the interest rate environment in select markets, concerns about oversupply. And lastly, you know, some questions about volatility, with the economy and jobs and a sort of understanding that underwriting really relies on rent growth, and that has given many investors some pause in multifamily.

I will say in the multifamily space, construction starts were down 46% this year relative to last year, which means that there is going to be some underserved markets as it relates to multifamily housing and new construction, which tends to then promote a pretty strong rebound on the other side. So a little bit of a sector spotlight on multifamily.

Jones: As it relates to office, New York is showing some, you know, large deals are back. The debt markets are facilitating that. And the last thing I would say about 2026 is that I think some of the core food groups are going to start seeing more activity. Fundraising has been heavily allocated to the alts, but we're starting to see that move back into the core food groups. So that'll be exciting.

Pilgrim: That’s really interesting to hear Marion. We're going into 2026 feeling far more positive — certainly in the U.S. and that's been evident from the last few days, certainly in the U.K. as well. We're feeling very positive. I think, generally we can look positively to 2026. There's more capital being allocated to real estate and there's more confidence from investors wanting to deploy that capital as well.