Commercial real estate in major California cities like Los Angeles and San Francisco has traditionally been viewed as a relatively safe place for investors to put their money, and industry analysts say that they have noticed a marked increase in the amount of foreign investment in late-2016. Chinese investors have been particularly active in U.S. commercial property markets as economic growth in their home country has slowed in recent years and doubts about the long-term prospects of the yuan persist.
Experts say that Asian investors in particular are attracted to commercial real estate in major U.S. cities because overbuilding has not impacted prices and banks are still willing to lend. While Asian money has been flowing into the United States for some time, financial analysts say that the pace of foreign investment has picked up since Donald Trump won the presidential election. The president-elect vowed to support the business community and slash regulations during a contentious campaign, and overseas investors have generally been buoyed by his victory.
The strength of the U.S. economy and the stability of the dollar have prompted Chinese investors to sink more than $300 billion into the American property market, and commercial assets in cities like New York and Chicago could become even more attractive if inflation begins to creep up as expected. The dollar soared to an almost nine-year high against the Yuan in the wake of Trump’s election victory, and this has raised fears that the Chinese government could restrict capital outflows.
Commercial real estate transactions involving foreign investors or buyers are often highly complex, and language or cultural differences may sometimes cause costly delays. Attorneys with a background in real estate law could help local developers or sellers to avoid such problems by ensuring that all parties are treated properly and reviewing the documents for provisions that could lead to negotiations breaking down.