GlobeSt.com: Why has Chinese investment exploded over the last decade?

Auction.com: One of the reasons the Chinese are interested in US real estate is that they clearly view it as one of the safer investment options available and one that still has significant investment upside. There are a lot of places where foreign money would have typically gone that really aren't very attractive options right now, such as European bonds. US real estate is perceived to be relatively safe because of the political and economic stability here and because Asian investors view US real estate as a relative bargain. While we think of San Francisco and New York real estate as expensive, compared to Hong Kong, prices seem cheap, and we often overlook this. Another thing that has driven more Chinese investment here is that China's economy has gathered momentum over the last decade, and created a lot more high-net-worth individuals. And the Chinese government did relax some of its regulatory control over these individuals investing outside the country. I think they are going to move as much money out of the country as they can as quickly as they can just in case the government changes the rules again.

GlobeSt.com: Why do Chinese investors find Manhattan to be their most compelling US market? What do they look for in US real estate?

Auction.com: The appetite primarily has been for office and hotel assets, and that's probably most of what you find in Manhattan. The numbers are a little skewed, though, if you look at investment activity from a dollar standpoint, since Manhattan, L.A. and San Francisco prices are all the highest in the country: you don't need a huge volume of transaction activity to represent a huge dollar figure. There's also a perceived safety in buying in a market like New York or San Francisco where prices always seem to go up regardless of what else is going on with the economy. So investors might be willing to overpay a little bit relative to other markets, because there will always be people renting those spaces, and unless you overpay by a ridiculous amount, you're unlikely to lose money on the value of the asset itself.

GlobeSt.com: What else should we take away from your infographic about Chinese investment?

Auction.com: One of the surprising takeaways for me is the growing diversity in geographies and property types. It's no surprise that you would see markets on the coast being predominant targets, but the fact that Chinese investors are looking at markets like Houston and Chicago does suggest that their targets are broadening out a bit. We might start seeing purchases of different types of assets as well. While offices and hotels are still the prime targets, we're starting to see growth in retail and multifamliy as well.