LA bests Manhattan as top US spot for institutional capital

Equity funds surge as foreign investment dips 50% in 2017

TRD LOS ANGELES /
May.May 07, 2018 02:30 PM
Los Angeles skyline (Credit: Public Domain Pictures)

In the never-ending battle between Los Angeles and New York, give another round to L.A.

The city led the nation last year with the highest level of institutional capital invested, beating perennial frontrunner Manhattan, according to a recent report from commercial brokerage CBRE.

The jump is largely attributable to a growth in investment from equity funds, which totaled roughly $6.2 billion, or 66 percent of all acquisitions last year. That’s up from just 28 percent in 2016, according to data from Real Capital Analytics.

But while equity funds flooded the market, foreign investment took a hit. The amount of foreign capital decreased by roughly 50 percent in 2017, dipping to $2 billion from $3.2 billion. In terms of total institutional capital, that translates to just 20 percent of investment last year.

In the report, CBRE says “this is not a story of government capital controls restricting outflows from China.” Yet in a report from competing brokerage Cushman & Wakefield that was published in March, Chinese investment showed a 55 percent decline in 2017, with deal volume dropping 67 percent.

Much of that decline is due to a series of capital controls imposed by the Chinese government that restrict investment in real estate and hospitality assets, the Cushman report said.

With the Chinese exiting the market, investment from Qatar took center stage with more than $500 million spent in Los Angeles, the Commercial Observer reported. Singapore, South Korea, Canada and the Netherlands followed, respectively, while China claimed eighth place.

Meanwhile, investment from sovereign wealth funds, pension funds, insurance companies and banks all declined in 2017.


Related Articles

arrow_forward_ios
From left: Howard Schwimmer and Michael S. Frankel, with 1601 W. Mission Boulevard and 2757 E. Del Amo Boulevard (Credit: Google Maps)

Rexford Industrial adds to LA portfolio with $100M in acquisitions

Andrew McDonald and At Mateo in the Arts District

Cushman’s West Coast chief talks expansion, DTLA market, the death of the starving baby broker & more

3339 Exposition Blvd. and Asher Luzzatto

Luzzatto Co. assembling creative office hub in West Adams

Jason Illoulian and the Cemex plant

Faring makes $30M assemblage play on WeHo/LA border

From left: Nuveen CEO Vijay Advani, Graymark founder/CEO Brian Hecktman

Graymark, Nuveen pay $97M for El Segundo creative office

La Mirada industrial building

Clarion pays $77M for La Mirada industrial project

510 Park Avenue and CEO of Monster Beverage Rodney Sacks

Monster Beverage affiliate guzzles down industrial project in San Fernando

From left: Saeed Nourmand, Michael Nourmand, Grant King and Richard Heyman

Relevant Group sues Nourmand & Associates’ founder, alleging extortion over hotel projects

arrow_forward_ios
Loading...