Jeffrey Cole, executive managing director of Cushman & Wakefield Capital Markets in Orange County, California

Onshore Chinese Investors Are Still Bullish on SoCal

Carrie Rossenfeld Finance & Capital Markets

While the percentage of Chinese investment in Southern California commercial real estate assets decreased by more than half between 2016 and 2017, there is still a cohort of Chinese investors who are strongly pursuing commercial property in this region, according to Jeffrey Cole, executive managing director of Cushman & Wakefield (C&W) Capital Markets in Orange County. C&W recently released a new report, 2017 China-US Inbound Investment Capital Watch, which offers insight into Chinese investment patterns into the U.S. and reveals the key reasons why China-U.S. investment took a nosedive in 2017 from 2016, as well as the future outlook for Chinese as well as other foreign capital investment into the U.S.

In response to the report, Cole says, “In 2015 and 2016, China-based investor groups made up approximately 20 percent of our bidding buyer pool for larger office and industrial assets in Southern California (to include Greater Los Angeles, Orange County, and San Diego). Comparatively, despite our overall buyer pool increasing in 2017, market share of new office sales transactions originating from foreign China capital decreased by more than half from over 15 percent share in 2016 to approximately 7 percent across Southern California last year.”

However, Cole emphasized, “while China-based investor activity has declined noticeably, established ‘onshore’ Chinese investors still remain active pursuers of large, high-profile offerings in this region. In addition, we still expect Chinese capital flow into Southern California, albeit at a reduced and slower pace in the short term.”

To view the full report, including charts, a brief video and blog post featuring C&W’s China-investment experts Xinyi McKinny and David Bitner, click here.