On February 13, 2020, the Committee on Foreign Investment in the United States (CFIUS) fully implemented the Foreign Investment Risk Review Modernization Act (FIRRMA) (see Trump and Trade Update of January 22, 2020). Under FIRRMA, CFIUS was granted additional authority to review certain real estate transactions involving foreign persons when the public or private real estate is located near designated airports, maritime ports, military installations or sensitive government facilities.

As such, CFIUS issued regulations effective February 13 pertaining to “Certain Transactions by Foreign Persons Involving Real Estate in the United States.” To fall under these regulations, the foreign person would have to gain at least three of the following property rights in covered real estate – (i) physical access to the property; (ii) the right to exclude others from the property; (iii) right to improve or develop the property; or (iv) the right to attach structures to the property. In working with other national security-related agencies, CFIUS prepared a list of designated airports, maritime ports, military bases and other sensitive government installations.

Covered real estate is defined as:

  • Ports: Is a covered port, located within, or will function as part of a covered port;
  • Close proximity: Areas within one mile of a certain identified military installations or other property;
  • Extended range: Areas within 100 miles of certain identified military installations;
  • Facilities located within designated counties and geographic areas: As designated in Appendix A of the regulations (see below); and
  • Off-shore ranges: Within any part of military installations, identified in the Appendix, that is within the territorial seas (12 nautical miles) of the United States

The list of designated airports and maritime ports can be accessed here:

The list of 190 military and sensitive government installations can be accessed here:

    • Military installations primarily located onshore are listed in Parts 1-3 of Appendix A to 31 C.F.R. Part 802.
    • Military installations primarily located offshore are listed in Part 4 of the Appendix. Further, CFIUS has noted that the Marine Cadastre National Viewer may also be helpful (users must apply the “Military Operating Area Boundaries” layer in order to see the different offshore zones).

There are various exceptions for certain real estate transactions, including investment in an “urbanized area” or “urban cluster,” as defined by the Census Bureau, a foreign person’s purchase or lease of a single housing unit, transactions involving certain commercial office space in a multi-unit commercial office building, and for certain “excepted foreign states.”  For more details on such exceptions, see Thompson Hine’s Business Law Update – Winter 2020.

Recently, CFIUS released a “CFIUS Part 802 Geographic Reference Tool” as a resource to locate specific real estate in relation to the listed military installations. This mapping tool allows users to input an address and determine the distance to certain military installations, but is provided for reference purposes only. In other words, it is not intended to be legally definitive as to whether a location is within the geographic range.

Notification to CFIUS for covered real estate transactions remains voluntary; however, only by receiving clearance from CFIUS will a transaction be exempt from future CFIUS action to unwind.