CFIUS Real Estate Jurisdiction: 31 CFR Part 802 Covered Transactions Explained

Before 2020, CFIUS jurisdiction was confined primarily to acquisitions of U.S. businesses. The Foreign Investment Risk Review Modernization Act changed that by authorizing CFIUS to review foreign purchases, leases, and concession agreements involving real property in the United States, regardless of whether any operating business is attached to the land. Congress recognized that physical proximity to sensitive national security infrastructure, including military installations, intelligence facilities, airports, and maritime ports, creates risks that exist independent of whether the foreign buyer is acquiring a business or simply acquiring land.

The Treasury Department implemented FIRRMA's real estate authority through 31 CFR Part 802, which took effect on February 13, 2020. Part 802 defines covered real estate by reference to proximity to the facilities listed in Appendix A, establishes which property rights trigger the regulations, enumerates exceptions that remove certain transactions from coverage, and sets out the filing procedures and timelines applicable to real estate transactions. The regulations have been amended since their initial adoption, most significantly through the 2024 rulemaking that expanded Appendix A and added new installation categories.

This sub-article is part of the CFIUS Review in M&A: National Security Clearance for Cross-Border and Foreign-Backed Transactions. It covers the full Part 802 framework in depth: the covered real estate definition and its geographic anchors; the Appendix A installation list and how it has evolved; the three-tier proximity zone structure; the property rights that trigger jurisdiction; the exceptions and their conditions; REIT and fund structures involving foreign capital; data center and infrastructure proximity overlaps; voluntary filing strategy; and the diligence workflow practitioners should use to assess any transaction with potential Part 802 exposure.

Acquisition Stars advises on CFIUS real estate jurisdiction analysis, proximity assessments, voluntary filings, and mitigation structuring. Nothing in this article constitutes legal advice for any specific transaction.

How 2020 FIRRMA Expanded CFIUS into Real Estate

Before FIRRMA, CFIUS reviewed transactions involving the acquisition of a U.S. business. The regulations defined a covered transaction as one that could result in foreign control of a U.S. business, and the concept of a business implied operations, employees, assets, and commerce. A foreign person who purchased a vacant parcel near a military base, or entered into a ground lease near a naval facility, did not necessarily acquire a business, and the pre-FIRRMA framework provided no direct mechanism to review that acquisition.

Congress identified this gap during the FIRRMA legislative process after public reporting on foreign acquisitions of farmland and development projects near sensitive military installations. FIRRMA's Section 721(a)(4)(B) added real estate transactions to the definition of covered transactions, authorizing CFIUS to review any purchase or lease by a foreign person of private or public real estate located within specified proximity to airports, maritime ports, or military or intelligence facilities. The statute directed Treasury to define the applicable zones and identify the relevant facilities through regulation.

The implementing regulations in 31 CFR Part 802 operationalized that authority. Part 802 is a self-contained regulatory framework that runs parallel to the business investment regulations in 31 CFR Part 800. A real estate transaction can be a covered real estate transaction under Part 802 without involving any covered business acquisition under Part 800, and the two frameworks have different definitions, different exceptions, and different mandatory declaration triggers. Practitioners who approach Part 802 by analogy to Part 800 risk misapplying both frameworks.

The fundamental design choice in Part 802 is geographic. Rather than define covered real estate by the character of the foreign buyer or the intended use of the property, the regulations define it primarily by where the property sits in relation to identified sensitive infrastructure. This geography-first approach means that the same office building or agricultural parcel can move in or out of covered status as Appendix A is updated and as the list of covered installations grows or contracts.

Covered Real Estate: Ports, Airports, and Installations

Section 802.213 of the Part 802 regulations defines covered real estate as real property that is located within, or will function as part of, one of four geographic categories: within one mile of a military installation, within 100 miles of certain military installations, within any airport designated as a covered airport under Appendix A, or within any maritime port designated as a covered port under Appendix A. The regulations also cover real property within or adjacent to a facility appearing in the Appendix A list of specific sensitive sites, including certain intelligence community facilities and other designated government installations.

Covered airports under Part 802 include commercial airports that process international passengers and cargo at designated capacity thresholds, as well as military airfields designated in Appendix A. The rationale for including commercial airports reflects concern that proximity to high-volume international transit points creates surveillance or interference opportunities for foreign actors who control nearby real property. The specific airports covered are enumerated in Appendix A, and not every airport qualifies. Smaller regional airports without significant international traffic and airfields that serve purely domestic general aviation are not automatically covered.

Covered maritime ports include major commercial seaports through which significant volumes of international cargo or passengers transit, as well as naval ports and Coast Guard facilities designated in Appendix A. The concern at maritime ports mirrors the airport concern: foreign-controlled real property near a port can serve as a platform for monitoring cargo movements, vessel traffic, or port security operations. Ports handling liquefied natural gas, military logistics, or critical infrastructure cargo receive particular attention in the regulatory framework.

Military installations covered by Part 802 include Army, Navy, Air Force, Marine Corps, and Space Force installations, as well as facilities operated by the intelligence community and certain other defense-related agencies. The sensitivity classification of the installation determines which proximity zone applies. Installations with the highest sensitivity classification appear in the Appendix A specific-site list and trigger jurisdiction over real property anywhere within their boundaries or the designated surrounding zone, regardless of the urbanized area exception.

Appendix A and the Evolving List of Sensitive Sites

Appendix A to 31 CFR Part 802 is the operative list that determines which specific installations anchor the Part 802 geographic zones. The list includes military installations by name and location, intelligence community facilities, covered commercial airports and seaports, and other designated sensitive sites. Because the proximity analysis is conducted against Appendix A rather than against a conceptual description of military or intelligence infrastructure, the scope of Part 802 jurisdiction is directly tied to the current content of the list.

Appendix A is not static. Treasury, in coordination with the Department of Defense, the intelligence community, and other interagency partners, reviews and updates the list to reflect changes in the national security landscape, the construction of new facilities, changes in the operational significance of existing facilities, and emerging concerns about proximity risks. A transaction that did not involve covered real estate at the time of initial diligence can become covered if Appendix A is amended before closing, and a property that was previously covered can lose that status if the relevant installation is removed or reclassified.

The structure of Appendix A is organized by installation type and proximity zone. Certain installations trigger the one-mile zone; others trigger the 100-mile zone; and the most sensitive sites trigger jurisdiction over real property anywhere within a specific defined area, which may be smaller than one mile in some cases and larger in others. Understanding which zone applies to a specific installation requires reading Appendix A carefully rather than applying a single default rule.

Practitioners conducting real estate diligence under Part 802 should verify the current Appendix A at the time of transaction analysis, not rely on a version downloaded at any earlier date. The Federal Register publication history for Part 802 amendments contains the official text of each Appendix A revision, and the CFR.gov version of Part 802 should reflect the most recent amendment. Given that the 2024 amendments significantly expanded the list, transactions analyzed against the pre-2024 Appendix A may have received an incomplete jurisdiction assessment.

Proximity Zones: 1 Mile, 100 Mile, Specific-Site

Part 802 establishes three distinct proximity zones, and the applicable zone for a given installation determines the geographic scope of CFIUS jurisdiction. The one-mile zone applies to a broad range of military installations, including Army posts, Navy bases, Air Force bases, and Marine Corps stations listed in Appendix A. Real property located within one mile of the boundary of any such installation is presumptively covered real estate, subject to the applicable exceptions.

The 100-mile zone applies to installations that CFIUS and the Department of Defense have identified as having particular sensitivity to long-range surveillance risks. The rationale is that certain types of intelligence collection, signals interception, or monitoring activities can be conducted at distances well beyond one mile, and proximity control for those installations must extend further to be meaningful. The 100-mile zone does not apply to all military installations; it applies only to those specifically designated for the extended zone in Appendix A. For a transaction near an installation with a 100-mile designation, real property anywhere within 100 miles of the installation boundary may be covered real estate.

The specific-site zone applies to the highest-sensitivity installations, including certain intelligence community facilities, space launch and tracking facilities, and other designated sites. For these installations, the regulations define a specific geographic area within which all real property is covered, rather than relying on a fixed-radius measurement. The specific-site areas are defined in Appendix A and may be described by reference to county boundaries, zip codes, or other geographic identifiers rather than measured radii.

Measuring proximity accurately matters because the zone boundaries are defined by distance from the installation boundary, not from the installation's center or its main entrance. For large installations that span thousands of acres, the boundary can extend many miles from the functional center of operations, and the one-mile or 100-mile zone measured from the boundary can encompass substantially more territory than a measurement from a central point would suggest. Transaction counsel should use geodetic measurement tools and current installation boundary data from official sources rather than relying on informal map review.

Covered Property Rights: Purchase, Lease, Concession

A transaction involves covered real estate only if the foreign person acquires a property right that the regulations identify as triggering CFIUS jurisdiction. Section 802.233 defines the property rights at issue to include purchase, lease, and concession of covered real estate. Each of these categories encompasses a range of transaction structures, and the regulations address several edge cases that arise in commercial practice.

A purchase of covered real estate is the most straightforward triggering transaction. A foreign person who acquires fee simple title to real property located within an applicable proximity zone has completed a covered real estate transaction. This includes acquisitions through entity structures, such as purchasing a U.S. LLC that holds title to the real property, provided the indirect acquisition gives the foreign person the substantive benefits of ownership, including the right to use, develop, or dispose of the property. Shell entity interposition does not avoid Part 802 jurisdiction if the foreign person is the ultimate beneficial owner of the real property interest.

A lease of covered real estate triggers jurisdiction when the lease conveys rights to use, access, or occupy covered real property for a period or in a manner that gives the foreign lessee meaningful control or access. Ground leases, long-term commercial leases, and exclusive use arrangements with significant terms are the most clearly covered. Very short-term, non-exclusive licenses to access a property for a limited purpose, such as a right-of-entry agreement for environmental testing, are less likely to constitute a covered lease, but the analysis depends on the specific terms of the arrangement and whether those terms effectively transfer the functional benefits of possession.

A concession agreement is a contract that grants a foreign person the right to operate a facility or provide services on government-owned real property, typically in exchange for revenue sharing or other consideration. Concession agreements for retail, food service, or transportation operations at airports, seaports, or on federal land near covered installations may constitute covered real estate transactions if the property rights conveyed under the concession are sufficient in duration and scope to provide the foreign concessionaire with access to proximity-sensitive real estate.

Excepted Real Estate and Meaningful Exemptions

Part 802 provides two categories of relief from its coverage provisions. First, certain transactions are excepted from the definition of covered real estate transactions, removing them from Part 802 jurisdiction entirely. Second, certain foreign persons qualify as excepted real estate investors, and their transactions receive more favorable treatment. Understanding which relief applies, and under what conditions, is essential for structuring transactions involving potential proximity exposure.

The excepted real estate transaction category covers transactions that involve property rights so limited or ancillary that they do not present the national security concerns that animate Part 802. Examples include certain rights-of-way for utilities or pipelines that cross covered real estate without conferring access or control over the surface, and certain mineral rights arrangements that do not convey surface rights. The regulations also except certain transactions involving single housing units under the private residence exception discussed in the following section.

The excepted real estate investor framework parallels the excepted investor concept in Part 800 for business investments. A foreign person qualifies as an excepted real estate investor if they are a national or entity from an excepted foreign state. The current list of excepted foreign states includes Australia, Canada, New Zealand, and the United Kingdom, the same four allied nations that qualify as excepted investors under Part 800. Transactions involving nationals of excepted foreign states may be exempt from Part 802 jurisdiction if certain conditions are met, including that the foreign person is not individually sanctioned, is not controlled by a non-excepted foreign state, and does not operate in violation of any applicable laws.

The excepted foreign state framework does not provide blanket exemption for all transactions involving nationals of the four listed countries. It provides an exception only if the specific transaction and the specific foreign person meet all the conditions for excepted status, and Treasury retains authority to revoke excepted foreign state designations. Reliance on the excepted investor framework requires affirmative analysis of whether each condition is satisfied, not an assumption that citizenship or incorporation in an allied country is sufficient.

Urbanized Area and Private Residence Exceptions

The urbanized area exception is one of the most practically significant provisions in Part 802 because it removes from covered real estate status a large volume of property that would otherwise fall within the one-mile zone of a military installation located in or near a major metropolitan area. The exception is defined by reference to the U.S. Census Bureau's urbanized area designations, which identify contiguous areas with high population density around core cities. Property located within a Census Bureau urbanized area is not covered real estate under Part 802, with two important carve-outs.

The urbanized area exception does not apply to property located within or abutting a military installation, regardless of whether the surrounding area qualifies as urbanized. Property that is within the installation boundary itself or that directly abuts the installation perimeter fence line retains covered status even if the broader neighborhood is densely urbanized. This carve-out prevents the urbanized area exception from effectively eliminating Part 802 jurisdiction in cities where military installations exist within urban cores.

The urbanized area exception also does not apply to the specific-site zones established for the highest-sensitivity installations. Even if a property is located in a Census Bureau urbanized area, if it falls within a specific-site zone defined in Appendix A for a high-sensitivity intelligence or defense facility, it remains covered real estate. This preserves the full scope of the specific-site zones regardless of surrounding development patterns.

The private residence exception removes from covered real estate status a single housing unit purchased by a foreign person for their own individual residential use, provided the foreign person does not use the property in any commercial capacity and the unit is not located within or abutting a covered installation. This exception reflects the judgment that an individual foreign national purchasing a home near a military installation for personal use presents materially different national security risks than a foreign government-affiliated entity acquiring commercial or industrial real property in the same location. The exception is narrow: it does not apply to multi-unit residential buildings, to properties purchased through entities, or to properties used for any commercial or rental purpose.

Real Estate Adjacent to Data Centers and Energy Infrastructure

Data centers and energy infrastructure have become increasingly significant in the Part 802 analysis as defense and intelligence agencies have expanded their use of commercially operated cloud computing facilities and as critical infrastructure components have been co-located with or physically proximate to military and intelligence installations. A data center that processes classified government contracts, hosts intelligence community cloud services, or supports defense logistics is functionally a defense facility even if it is privately owned and operated. Real property adjacent to such a facility may be covered real estate if the facility itself is listed in Appendix A as a covered site.

The intersection of Part 802 and data center proximity is sharpest for facilities operated under programs such as the Intelligence Community Information Technology Enterprise, the Joint Enterprise Defense Infrastructure, and similar government cloud contracting vehicles. Facilities that operate under classified contracts with national security agencies may be added to Appendix A as sensitive sites, and the surrounding real estate would then become covered under the applicable proximity zone. Foreign investment in real estate near large commercial data center campuses in Northern Virginia, the Pacific Northwest, and other data center concentration zones should be assessed against Appendix A with particular care.

Energy infrastructure overlaps with Part 802 in contexts involving power plants, substations, and transmission facilities that provide dedicated or priority service to military installations. A foreign person acquiring real property near a power generation facility that serves a covered military installation, or near a fuel storage and distribution facility that supplies defense logistics operations, may be acquiring proximity to infrastructure that CFIUS views as part of the military installation's operational footprint. The regulations do not draw explicit lines around energy infrastructure as a standalone category, but the specific-site provisions of Appendix A can encompass installations that include significant energy infrastructure components.

Foreign investment in large-scale renewable energy projects, including solar farms and wind installations, has attracted CFIUS attention in cases where the project is sited near covered military installations or where the transmission infrastructure for the project passes through proximity zones. The physical footprint of a utility-scale renewable energy project can span thousands of acres, increasing the probability that some portion of the project area falls within a one-mile or specific-site zone. Developers and foreign investors in utility-scale energy projects should conduct proximity analysis early in the site selection process rather than after project financing has been committed.

REITs, Funds, and Indirect Ownership Structures

Real estate investment trusts and private real estate funds that include foreign capital present some of the most analytically complex Part 802 questions because the foreign investor typically holds an indirect interest in a portfolio of properties rather than a direct ownership interest in any specific parcel. Whether the indirect interest constitutes a covered real estate transaction under Part 802 depends on whether the foreign investor has property rights in the underlying real property that are sufficient to trigger jurisdiction, rather than merely a financial interest in an entity that holds real property.

Treasury's position, reflected in the Part 802 regulations and related guidance, is that indirect ownership of real property through an entity can constitute a covered real estate transaction if the foreign person's interest in the entity gives them property rights in the underlying real estate. Relevant factors include whether the foreign investor has the right to direct the acquisition or disposition of specific properties, whether they have access or use rights to specific properties through their fund interest, and whether the fund structure is designed or operated in a manner that effectively transfers property rights to the foreign investor notwithstanding the entity interposition.

A purely passive investment in a diversified REIT, in which the foreign investor holds publicly traded shares, receives only financial distributions based on portfolio performance, has no board representation, and exercises no control over specific property decisions, is less likely to be treated as a covered real estate transaction than a targeted investment in a private fund where the foreign LP has consent rights over individual acquisitions, access rights to specific properties, or information rights that go beyond standard financial reporting. The distinction is not about the REIT or fund label; it is about the substantive rights the foreign investor holds relative to the underlying real estate.

Foreign sovereign wealth funds and state-owned enterprises investing in U.S. real estate through fund structures receive heightened scrutiny because their beneficial ownership is a foreign government, which is among the most sensitive investor categories under the CFIUS framework. A sovereign wealth fund that acquires even a minority interest in a real estate fund holding properties near covered installations may face CFIUS review of the transaction as a covered real estate transaction or as a covered control transaction depending on the rights conveyed by the fund interest.

Voluntary Filing Strategy for Sensitive Proximity Deals

Part 802 does not require a mandatory declaration for most covered real estate transactions. Mandatory declarations under the real estate regulations apply only to a narrower subset of transactions involving foreign government nexus or other specific characteristics. This means that many covered real estate transactions can proceed without any filing, subject to CFIUS retaining jurisdiction to investigate and potentially unwind completed transactions. The voluntary filing framework provides a mechanism for parties to obtain clearance certainty by proactively submitting a notice or declaration.

The strategic case for voluntary filing is strongest when the transaction involves real property clearly within a proximity zone, the foreign buyer has a country-of-origin profile that could attract CFIUS attention in a post-closing investigation, or the intended use of the property overlaps with sensitive site concerns. A Chinese, Russian, or Iranian entity acquiring real property within one mile of a naval base presents a profile where the probability of a post-closing investigation is high, and the cost of that investigation, including the risk of a divestiture order, substantially exceeds the cost of a voluntary filing.

Voluntary filing can take the form of a short-form declaration or a full notice. A declaration is a summary submission that starts a 30-day review period, at the end of which CFIUS may clear the transaction, request additional information, or invite the parties to file a full notice. A full notice initiates a 45-day review period extendable by a 45-day investigation and further extensions in national security cases. For real estate transactions with clear proximity exposure and uncomplicated ownership structures, the declaration pathway is often sufficient and quicker than a full notice.

Timing matters in the voluntary filing decision. CFIUS clearance obtained before closing provides certainty that the transaction will not be subject to post-closing review of the same matter. Filing too late in the transaction timeline, such that the CFIUS review period extends beyond the anticipated closing date, can require extending the purchase agreement, incurring financing cost overruns, or renegotiating conditions to closing. Buyers who identify potential Part 802 exposure during initial diligence should begin the voluntary filing analysis early enough to allow for a CFIUS review period that fits within the deal timeline.

2024 Regulatory Expansion and Increased Site List

The 2024 rulemaking process produced the most significant amendments to 31 CFR Part 802 since its initial adoption in 2020. The amendments expanded Appendix A in two respects: they added new installations to the list of covered sites, and they introduced new categories of sensitive infrastructure that had not previously been explicitly enumerated in the list. The effect was to extend the geographic footprint of Part 802 jurisdiction in ways that affect real estate transactions in states and regions that had previously been at the periphery of the covered zone analysis.

The 2024 amendments added new military training ranges, testing facilities, and technology development installations to Appendix A. These additions reflect the growing importance of emerging technology domains, including hypersonics, directed energy, space systems, and autonomous platforms, to national security. Facilities that test and develop these technologies, including ranges and proving grounds, are now covered installations, extending Part 802 jurisdiction to real property near locations that had not previously appeared in the list.

The 2024 amendments also addressed the intelligence community's infrastructure more comprehensively than prior versions of Appendix A. Certain facilities that had been added to Appendix A informally or through interim rules were codified in the 2024 amendments, and the specific-site zones for some intelligence community installations were expanded to reflect updated assessments of the surveillance and access risks associated with proximity to those facilities. The practical effect is that some properties previously analyzed as outside the covered zone are now covered under the expanded specific-site designations.

Going forward, Appendix A should be expected to continue expanding. The Biden administration's executive orders on protecting national security in the CFIUS context signaled a policy direction toward broader coverage, and the Trump administration's posture on foreign investment from countries of concern has reinforced the trajectory toward a larger covered installation list. Foreign buyers and their counsel should treat Appendix A as a living document and build into deal timelines the verification step of confirming the current list rather than relying on prior analysis.

Diligence Workflow and Site Identification Tools

A structured Part 802 diligence workflow begins with identifying the precise legal description and GPS coordinates of the subject property, then measuring the distance from that property to each installation listed in Appendix A using geodetic calculation tools. The measurement must be taken from the property boundary to the installation boundary, not from centroids, main gates, or headquarters buildings. For large properties spanning multiple parcels, the measurement should be made from the nearest point of the property boundary to the nearest point of the installation boundary.

Mapping tools that overlay Appendix A installations with the subject property location provide a useful first-pass screen, but they require calibration against official installation boundary data rather than generic base maps, which may not reflect the current extent of a military installation that has expanded its boundary through land acquisition or easement. The Department of Defense publishes installation boundary data through official channels, and the intelligence community facilities listed in Appendix A may require consultation with counsel who have worked with classified and controlled installation boundary information to confirm precise proximity.

After proximity is confirmed, the diligence workflow requires analyzing whether the transaction involves property rights sufficient to trigger jurisdiction, whether any exception applies (urbanized area, private residence, excepted real estate investor), and whether the foreign buyer's profile creates mandatory declaration obligations or a strong voluntary filing case. This analysis should be documented in a written memorandum that records the proximity measurements, the Appendix A version used, the exception analysis, and the filing recommendation, because the memorandum serves as the evidentiary basis for the filing decision if CFIUS later inquires about the transaction.

Counsel advising on Part 802 transactions should also assess whether the transaction could qualify as a covered investment in a TID US business under Part 800 in addition to, or instead of, a covered real estate transaction under Part 802. Some real estate operating businesses, such as data center operators, logistics companies, and utility operators, may qualify as TID US businesses, and the acquisition of such a business that also involves the acquisition of covered real estate may require analysis under both regulatory frameworks.

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