Chinese investors were the biggest subgroup of foreign investors in commercial real estate in the U.S. in 2016, with deal volumes reaching a record high of $19.2 billion, up 10% from $17.3 billion in 2015, according to a new report from Cushman & Wakefield.
Chinese investment made up about 29% of total foreign investment in U.S. commercial real estate, ahead of Canada, the second largest foreign investor, which invested $13.1 billion.
Most want to hedge against a slowing economy and depreciating yuan, and are willing to pursue mega-deals. Most transactions in 2016, 62% to be exact, were over $1 billion.
Chinese insurance companies were among the most active investors. Between 2015 and 2016, more than half of all investments by Chinese investors were by Chinese life insurers.
The current stream of investments could become a river. Only 1% of the $1.83-billion Chinese insurance industry's assets are invested in U.S. real estate, says the Chinese Insurance Regulatory Commission.