The world’s big sovereign investment funds have mostly kept their tentacles out of US commercial property. Now, dealmaking in the real estate market has dried up, the dollar is weak and analysts say property prices could drop by 10-15 per cent in the coming year. Government-backed investment funds, far less reliant on debt than US buyers, may find their advantages have grown too big to ignore.

With about $2,600bn in assets, sovereign wealth funds already dwarf the hedge fund industry and could balloon to $17,500bn in 10 years, according to Morgan Stanley. Much of that capital is invested in government bonds. But the funds’ tolerance for risk is growing, along with their treasure chests, and Wall Street banks are courting their business.