CHICAGO—One of the more remarkable recent developments in US real estate has been the many headline-grabbing buys by foreign investors, especially those from Canada, South Korea and China. But some experts point out that although these investments garner headlines, their importance to the overall economy can be overstated. At last week's NAI Global Market Outlook, for example, Dr. Peter Linneman, chief economist for NAI Global, and Sam Zell, chairman of Equity Group Investments, touched on this during their conversation with Jay Olshonsky, president of NAI Global. GlobeSt.com later sat down with Linneman and Olshonsky to delve into the issue further.

According to Linneman, the first difficulty with judging foreign investment in the US is that “the data on the subject is terrible.” Big investors located in the US can attract funds from Abu Dhabi or other oil-rich countries, for example, and buy US properties, but since the actual legal buyer is American, “it's not counted as foreign investment.”

And it can be difficult to even identify what's foreign money and what's not, Linneman adds. For example, he advises a high net worth German family that years ago invested roughly $1 billion in the US. That original investment has multiplied, but since the money has never been repatriated it's an open question on whether it's now foreign or American money.