Political Uncertainty May Slow Foreign Investment This Year

Some foreign investors may be taking a wait-and-see approach this year when it comes to investing in the U.S., in particular due to the political environment.

Bisnow Capital Markets LAAckman Ziff managing director Sandeep Pathak, Nixon Peabody's Justin Thompson, World Trade Center - Los Angeles' Stephen Cheung, Gaw Capital Partners' Mike Hu and Gemdale USA's Michael Krupa
Karen Jordan/Bisnow // Ackman Ziff's Sandeep Pathak, Nixon Peabody's Justin Thompson, World Trade Center - Los Angeles' Stephen Cheung, Gaw Capital Partners' Mike Hu and Gemdale USA's Michael Krupa

Ackman Ziff managing director Sandeep Pathak said President Donald Trump's policies and what he will be successful in moving forward will have a significant impact.

While there was more interest last year in Class-A office and trophy hotels from foreign investors, Gaw Capital Partners senior vice president of capital markets Mike Hu said he is seeing a shift this year.

He recently talked to a Chinese investor, for example, who is only interested now in medical office buildings and industrial.

Bisnow Capital Markets LA 2017
Karen Jordan/Bisnow Crowd at Bisnow's Los Angeles capital markets event 2017

Chinese investors are concerned about getting regulatory approval to be able to invest abroad, according to Hu.

"I think there's still a lot of demand from Asia, it's just they can't get the capital out," Hu said at last week's LA Capital Markets and Foreign Investment event.

Bisnow Capital Markets LANixon Peabody's Justin Thompson, World Trade Center - Los Angeles' Stephen Cheung, Ackman Ziff managing director's Sandeep Pathak, Gaw Capital Partners' Mike Hu and Gemdale USA's Michael Krupa
Karen Jordan/Bisnow //Nixon Peabody's Justin Thompson, World Trade Center - Los Angeles' Stephen Cheung, Ackman Ziff managing director's Sandeep Pathak, Gaw Capital Partners' Mike Hu and Gemdale USA's Michael Krupa

When it comes to investing, a lot depends on the profile of the investor, so it is hard to generalize, according to Krupa.

It also depends on the fundamentals of each city.

World Trade Center - Los Angeles President Stephen Cheung
Karen Jordan/Bisnow World Trade Center - Los Angeles president Stephen Cheung

Cheung said he is optimistic and believes overall there is still a lot of trust in the U.S. market. He said it is important to watch the global scene and not just focus on China.

He said the new policy changes that have begun under the Trump administration have caused some angst among investors.

Hu and Cheung agree there might be a slowdown at the beginning of this year, but Cheung said the interest is still there.

"I think we're sitting in a very good place," he said.

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