Bargaining Power in International Property Investment Markets: The Impact of China and the U.S

We develop a structural framework in which cross-border commercial real estate prices reflect fundamentals, a macro-valuation component, and an endogenous nationality-specific bargaining wedge. Building on recent work on the interest rate-growth differential, safe-asset shortages, and global capital-flow frictions, we show that capital controls, geopolitical tensions, and financial-market depth shift investors' outside options and beliefs, generating systematic pricing differentials across nationalities. Using 1,113,349 global commercial property transactions from 172 countries, we provide the first large-scale empirical estimates of these bargaining wedges. After controlling for detailed property characteristics and multi-layer fixed effects, Chinese investors pay persistent premia -- 18-22 percent on average and up to 21.7 percent in offshore markets -- while U.S. investors obtain 3-4 percent discounts. These wedges respond sharply to macroprudential and geopolitical regimes: China's capital-control tightening compresses premia, whereas the U.S.-China trade war increases them for both sides. Our results reveal that nationality-specific bargaining power is an equilibrium outcome shaped jointly by macroeconomic valuation forces, regulation, and geopolitical shocks.