5 Hurdles for German Family Offices in US Property

June 6, 2025

Introduction: When Plain Persuasion Isn’t Enough

“We’d like to diversify – but…”

This phrase recurs in conversations with German family offices. It rarely signals a categorical no; instead, it reflects emotional and structural reservations that persist—even when solid investment opportunities are on the table. But in a fragmented capital market fraught with geopolitical uncertainty and declining domestic yields, inaction becomes a strategy—and one that erodes capital over time.

Critically: Most German family offices still allocate over 80 % of their real estate portfolios domestically ¹, even as net initial yields in major German cities fall below 2.5 % ². Inflation ³ continues to erode returns. Meanwhile, public discourse around wealth taxes, one-off levies, and property restrictions—including rent limits and mandatory renovations—demonstrates that domestic asset ownership is no longer immune to political interference.

Yet cross-border investment is not just defensive: it opens doors to dynamic markets, robust legal protections, and often superior risk-adjusted returns.

1. “I Don’t Know the Market” – Fear of Losing Control

Many asset owners have deep roots in German real estate: they know the neighbourhoods, construction quality, notaries, and tenancy laws. This familiarity creates a sense of control—even when regulation and costs frequently shift.

Venturing into Florida, Texas, or North Carolina can seem distant and abstract. Yet these U.S. markets consistently rank at the top in global real estate transparency ⁴. They offer structured transaction processes, public access to pricing data, and strong institutional protection of property rights ⁵.

What helps: Transparency, trust—and experienced local partners. Digital reporting, structured due diligence packages, regular video calls, and German-speaking contacts on the ground significantly reduce perceived risk.

2. “What About Taxes?” – Structuring Questions & Compliance Concerns

Tax is one of the top causes of investor anxiety. How will U.S. income be taxed in Germany? Can double taxation be avoided? What about U.S. estate tax?

These concerns are solvable. There are established structures that avoid double taxation, optimize distributions, and eliminate estate tax exposure ⁶. A typical framework is a U.S. Limited Partnership, held through a European or U.S. holding company ⁷—tailored to each investor’s domicile and succession goals.

What matters: Not a tax degree—but a sound structure built by advisors versed in both systems. The real danger lies in poor planning, not taxation. Professional cross-border tax support is essential.

3. “We Have No Access to Such Deals” – The Missing Network

Many family offices are eager to invest internationally, but lack reliable access. Unlike Germany’s club deals or project networks, U.S. structures may seem opaque ⁸.

The barrier isn’t capital; it’s access—to vetted deal flow, local operators, and investor-friendly structures. Often, it’s not the asset that’s in question, but those overseeing it ⁹.

What helps: Specialist partners with on-the-ground presence and a proven track record. Structured for German investors, with transparent entry, control, and reporting mechanisms.

4. “This Is Too Much Effort” – The Myth of Complexity

International investment often evokes images of bureaucracy: bank accounts, taxes, legal complexity. Yet in places like Florida, Texas, and North Carolina, the process is often simpler than in Germany: digital transactions, streamlined notaries, and clear ownership systems ¹⁰.

You don’t need a New York office—just a partner who handles everything end-to-end: from structuring and due diligence to reporting and exit.

What helps: Clear onboarding, digital reporting, and structured processes turn perceived complexity into manageable steps.

5. “What If Something Goes Wrong?” – Emotional Loss Aversion

Fear of losing money overseas—simply because you can’t manage it directly—is normal. But many domestic investments offer negative real returns: yields under 2.5% coupled with inflation over 2% ¹¹.

Meanwhile, domestic political interference is rising: debates over wealth levies, rent caps, and mandatory upgrades show property is no longer untouchable.

What helps:

Verified track records and partner commitment
Scenario-based risk analyses—beyond just expected returns
Clear exit strategies and liquidity planning
Built-in safeguards: preferred equity, partner “skin in the game,” thorough due diligence

Understanding structure and “what-if” scenarios builds confidence and encourages action.

Conclusion: From Hesitation to Action

The caution German family offices feel toward cross-border investments is understandable—but comes with risk. Capital today seeks resilience across legal, geographic, and economic dimensions.

Domestic ownership is under increasing pressure. International investments offer diversification—for performance and regulation alike.

It’s time to act—not blindly, but deliberately. With strong structures, trusted partners, and transparent reporting, investing abroad is not only possible but prudent.