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Chinese money moving to US commercial property

Interest in U.S. commercial real estate is perking up, particularly from China, as expectations of pro-growth policies from President-elect Donald Trump spark demand for dollar-denominated assets.

"(Investors) are seeing the U.S.commercial real estate marketplace as really standing out on a global basis," said Hessam Nadji, president and chief executive at commercial real estate firm Marcus and Millichap.

"It's not being overbuilt; it's been very well balanced in this particular cycle in terms of loans that are not going up, the leverage that was very well balanced. They're at much lower risk at this stage of recovery than we've seen in the past," he told CNBC's The Rundown.

Concerns over the dollar's appreciation are also prompting some motivation for capital allocation into the U.S. "particularly because the Chinese economy is slowing" and as the yield profile of commercial real estate is competitive, Nadji added.

"The expectation is inflation will go up, job growth will improve and therefore commercial real estate becomes a better hedge in that scenario on a longer-term basis."

A home for sale in San Francisco. Chinese investors have been snapping up US real estate property at a rapid rate, with investments topping $300 billion.
Getty Images
A home for sale in San Francisco. Chinese investors have been snapping up US real estate property at a rapid rate, with investments topping $300 billion.

The dollar has climbed to eight and a half year highs against the yuan in the aftermath of Trump's win, of the broader strength in the greenback as well as continued concerns of capital outflows from China.

The top cities for foreign investment are:

Manhattan

Los Angeles

San Francisco

Chicago

Washington D.C.

(Source: Marcus and Millichap)

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