If foreign money or ownership is in a U.S. real estate deal, I would screen for CFIUS before the LOI. That is the short answer.
In plain terms, this article says I need to answer 4 questions first:
- Which rule applies? Part 802 for real estate, Part 800 for business deals, and sometimes both
- What rights are changing hands? CFIUS looks at rights like access, exclusion, development, and fixed structures
- Where is the property? A site near a listed military location or covered port can trigger review
- Who is the foreign party? Some buyers may fall outside Part 802 if they meet the test for an excepted investor
The article also makes the board-level point clear: CFIUS is not just a filing issue. It is a deal-timing and deal-structure issue. If I wait until signing or closing, I may end up with delay, mitigation terms, civil penalties, or even a forced sale after closing.
A few practical takeaways stand out:
- Screen location early
- Confirm foreign-person status early
- Decide between no filing, a declaration, or a full notice
- Assign post-closing compliance to a named owner
- Keep records current, not just at closing
Episode 0018 – CFIUS on the Ground: How Real Estate Became a Security Review
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Quick Comparison
| Topic | What the article says |
|---|---|
| Main split | Part 802 covers real estate; Part 800 covers broader business deals |
| Main trigger | Foreign person gets covered property rights in a sensitive location |
| Main exclusions | Certain housing, some urbanized-area property, some office/retail uses, and some excepted investors |
| First screening step | Map the asset against Appendix A sites and covered ports |
| Filing paths | No filing, short declaration, or full notice |
| Main downside | Penalties, mitigation breach issues, and forced divestiture |
Bottom line: I would treat CFIUS review as part of deal structuring from day one, not as a legal cleanup item at the end.
Which Real Estate Transactions Are Covered and Which Are Not
Covered Real Estate: Property Rights, Deal Types, and the Foreign Person Test
Once Part 802 comes into play, the next step is simple: figure out whether the deal transfers covered real estate rights.
Part 802 applies when a foreign person acquires those rights. And CFIUS cares about the rights that change hands, not the label on the deal. In plain English, it looks at whether the buyer gets rights tied to:
- access
- exclusion
- development
- fixed structures
That means coverage depends on where the property is and what rights are being transferred. A deal doesn’t slip outside Part 802 just because the contract calls it a lease, concession, or something else.
The payment method doesn’t change that analysis either. Cash, debt, seller financing – none of that controls CFIUS coverage. What matters is the transfer of covered property rights.
Even so, not every deal falls inside Part 802. Some transactions, and some investors, sit outside its reach.
Excepted Transactions and Excepted Real Estate Investors
Part 802 also carves out certain transactions from CFIUS jurisdiction.
Excepted Real Estate Investors (ERIs) are foreign persons from designated allied countries who meet the required eligibility tests, including no disqualifying ties to foreign governments or militaries. On top of that, some exclusions apply based on the property type or deal structure itself, no matter who the buyer is.
Here’s the key split:
| Factor | Covered Transactions | Excepted Transactions |
|---|---|---|
| Transaction type | Purchases, leases, and concessions | Single housing units; certain urbanized area properties |
| Rights granted | Access, exclusion, development, or fixed structures | Limited retail or food service at covered ports; qualifying commercial office space |
| Investor profile | Foreign persons acquiring covered property rights | Excepted Real Estate Investors from designated allied countries |
| Location | Near sensitive ports or military installations | Generally excluded unless a geographic trigger applies |
| Part 802 result | Potential mandatory filing or mitigation agreement | Outside Part 802 jurisdiction |
Screen the asset’s location and the actual rights being transferred before the LOI. That’s the fastest way to sort covered deals from excluded ones.
Sensitive Sites and Geographic Triggers That Drive CFIUS Risk
After rights and investor status, location is often the fastest Part 802 risk test. A property can look routine on paper and still turn into a CFIUS issue the moment you check it against the current Appendix A and covered-port lists and map it against the right geography. That’s why location screening should be a first-pass coverage test, not a legal check you save for the end. Once that screen is done, the next move is figuring out whether the issue calls for a filing or a change to the deal.
Appendix A Sites, Covered Ports, and Proximity Rules
Part 802 screening starts with Appendix A military sites and covered ports. The main question isn’t just where the property is. It’s whether the location puts it inside the proximity rules or another geographic trigger in the regulations. And because those lists can change, teams should use the latest version instead of leaning on old diligence files.
How to Screen Assets and Portfolios Before LOI or Closing
Start with GIS mapping, title review, and boundary checks. Then compare each target property against the current Appendix A and covered-port lists. Tenant use can affect coverage too, so don’t stop at the parcel line. If a location hit shows up, send it for specialist CFIUS review before capital is committed. That can help avoid a later restructure or, worse, an unwind.
| Sensitive-Site Category | Screening Focus | Primary Check |
|---|---|---|
| Appendix A sites | Proximity to listed sites | GIS mapping against the current Appendix A list |
| Covered ports | Current covered-port check | Compare the asset against the current covered-port definition |
A positive match moves the deal from screening to filing analysis.
The Review Process, Filing Options, and Penalties for Non-Compliance
CFIUS Real Estate Review: Step-by-Step Screening Process for 2026
If location screening flags risk, the next step is simple in theory and messy in practice: figure out the filing path, move through review, and stay alert to what can go wrong after closing.
From Internal Risk Review to Declaration or Full Notice
Once a location screen raises risk, the team should move at once to filing analysis. Start CFIUS triage at first seller contact, complete jurisdiction screening before LOI, and finish filing analysis before signing.
That early triage helps answer a very practical question: can the deal move forward with no filing, a declaration, or a full notice?
This is where boards need to slow down and make a clear call. The filing path is not just a paperwork issue. It’s a risk-allocation decision. A declaration makes sense for lower-risk deals. A full notice makes more sense when the facts are close, the asset is sensitive, or the case is likely to draw mitigation.
From there, the main outcomes are straightforward:
- Clearance
- Mitigation
- A request for more information
Civil Penalties, Mitigation Breaches, and Unwinding Risk
Closing does not end CFIUS exposure. Problems can show up long after the deal closes, which is why post-closing compliance needs real ownership.
If the deal includes ongoing obligations or mitigation terms, assign a specific owner to each obligation, keep an evidence file current every quarter, and treat post-closing compliance as a standing obligation. That means no vague handoffs and no “we’ll deal with it later” approach.
If something slips, the downside can be steep. Breaches can trigger civil penalties and, in severe cases, forced divestiture.
Board-Level Planning: A 2026 CFIUS Playbook for CEOs and Investors
Governance Controls for Cross-Border Real Estate Transactions
Once post-closing exposure is clear, the board’s next job is to design controls.
In real estate, most CFIUS risk comes from weak process, not bad intent. That’s why boards should give screening and escalation to specific internal roles. This matters any time a deal includes foreign capital, ownership, lenders, tenants, or operating partners.
| Governance Tool | Internal Owner | Business Benefit |
|---|---|---|
| Sensitive-Site Mapping | Chief Risk Officer (CRO) | Flags Part 802 location triggers early |
| Ownership-Structure Review | General Counsel | Confirms foreign-person status and control |
| Escalation Thresholds | Investment Committee | Ensures high-risk deals receive board scrutiny |
| Compliance Dashboard | CEO / Board | Tracks filing status and regulatory exposure |
| Advance Regulatory Engagement | CEO / Board | Reduces filing risk and post-closing disruption |
But here’s the catch: those controls only help if the board uses them before signing.
Board review needs to start before the deal is signed. Counsel should confirm that the entity structure does not shift foreign-person status.
Key CFIUS Rules Every Executive Should Know in 2026
The board’s role is simple: force early screening, ownership review, and escalation. When ownership review, site mapping, and escalation happen early, CFIUS becomes a deal risk you can manage instead of a late-stage shock.
If a transaction is close to the line, advance regulatory engagement is better than waiting until closing.
The board should treat CFIUS as a structuring issue from day one. Board oversight needs to begin before the deal is signed.
For executives who want to stay current on regulatory developments and governance best practices, CEO Hangout offers peer connections and curated discussions for U.S. real estate leaders.
FAQs
How do I tell if Part 800, Part 802, or both apply?
It depends on the transaction. Part 800 applies to acquisitions of a U.S. business, while Part 802 applies to covered real estate transactions.
In some deals, both can apply. That happens when a single transaction includes a U.S. business acquisition and a real estate piece that meets the covered real estate rules.
Investors should also look closely at whether the deal involves a sensitive site or critical infrastructure.
What rights in a real estate deal trigger CFIUS review?
CFIUS review can come into play when a foreign investment in U.S. real estate gives a foreign person rights like access, presence, or some level of control over property near sensitive U.S. government, military, or critical infrastructure sites.
State laws may draw the map with set distance limits. But CFIUS looks at something different: whether the deal creates national security concerns. That matters even more when a foreign government is involved or the property touches a sensitive sector.
When should a deal team start CFIUS screening?
A deal team should begin CFIUS screening at the first contact with the seller or the seller’s intermediary.
Starting early gives the team time to spot compliance gaps, judge how important the deal may be from a national security angle, and finish key due diligence before signing a binding agreement. If you wait until a formal offer is on the table, you can run into costly delays and unpleasant regulatory surprises.