Chinese commercial property investment climbs in Los Angeles

Photo: Neil Kremer

China’s buyers are developers are investing their capital in a range of markets around the world, from Australia and Europe to the US. Indeed, accordng to JLL, transaction volumes have soared from $5.6 billion in 2012 to $11.3 billion in 2013. Now, that figure is expected to hit as high as $15 billion in 2014.

In America, Los Angeles is one of their top targets, receiving $6780 million in Chinese capital, with the city’s stability, affordability and potential for capital growth boosting its appeal.

“Chinese investors are finding themselves increasingly comfortable in L.A., which is a testament to the market’s strong fundamentals, opportunities to obtain secure returns and transparency,” says Michael Zietsman, Managing Director of JLL’s Capital Markets.

“The level of confidence is evident through the wide spectrum of product and projects they are targeting.”

Downtown is the city’s major hotspot, with buyers building upon hotel acquisitions – there are, JLL estimates, more than $1 billion of motivated Chinese capital seeking high-quality California hotel investments – to larger, mixed-use developments. Indeed, 3.2 million square-feet of hotel property and 2.9 of multifamily properties are in the pipeline for 2017, making now an ideal time for Chinese investors to step up their activity.

“Many of the groups interested in L.A., especially Downtown, are new to U.S. development projects, but they are targeting outstanding locations and placing capital toward the development of many mixed-use properties,” explains Jeff Adkison, Managing Director of JLL’s Capital Markets.