2017 China-US Inbound Investment Capital Watch

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Chinese investment in U.S. commercial real estate slowed in 2017 following the imposition of capital controls. Megadeals and hotel acquisition volume experienced the greatest declines. In March, the Chinese government further clarified capital controls under which investments in real estate and hospitality assets are classed as restricted, but not prohibited.

  • Investment is concentrated in five U.S. markets—New York, San Francisco, Los Angeles, Chicago and Seattle. New York and San Francisco - account two-thirds of every Chinese investment
  • Non-institutional players dominated acquisition activity in 2017 with sovereign wealth funds and insurers, in particular, becoming less active.
  • Demand for office and industrial properties remained relatively supported in 2017 in contrast to hotel, development sites and multifamily. Looking past the exceptional years of 2015 – 2016, trend acquisition volumes are rising across property types.
  • While Chinese investment in U.S. CRE declined, global outbound investment set a new record with the UK a prime beneficiary.