Editorial|&utm_term=|Website-Editorial-NAT(Website)|"> Auction.com, said part of the reason for record CRE deal volume in first-quarter 2015 was the continuing infusion of foreign capital—China and Singapore investors in particular have ramped up their US CRE investment, and the $1.95-billion purchase of the Waldorf Astoria in Manhattan by the Chinese firm Anbang Insurance Group was the highlight of the first quarter. For a deeper look into the issue, GlobeSt.com spoke exclusively with Sharga about whether we need to be concerned about this burgeoning trend.

GlobeSt.com: Is foreign investment ultimately a good thing or a bad thing for US real estate and our economy?

Sharga: I tend to fall on the side of it being a good thing in general, particularly when we're talking about commercial real estate. Those sorts of investments tent to have professional management, and the investment tends to be protective in terms of maintenance and upkeep. There's little risk of—for lack of a better term—collateral damage form people using those assets. I'm probably less comfortable if we're talking about a lot of foreign investment in residential properties because you have the problem of an absentee landlord. But in CRE, when limited capital is available from domestic investors, and in a market like this when all sectors are doing reasonably or very well, foreign capital presents an opportunity for more capital to be deployed in more markets, which is a good thing.

GlobeSt.com: What does increased foreign investment potentially mean for the health of our industry?

Sharga: For CRE in general, I think it bodes well. There's less risk on the commercial side than on the residential side with foreign capital.

GlobeSt.com: Does foreign investment “hurt” the American “brand” of real estate?

Sharga: I don't think so; 99% of the US population doesn't know or care who owns One Rockefeller Plaza. This is an iconic American property that was at one point owned by a group of Japanese investors, but that didn't seem to tarnish the brand, and subsequently they resold the property anyway. No, I think there is probably a little xenophobia among US investors, but that's because it represents competition. You may not get the asset you wanted at the price you were hoping for, but it's good for us overall. It does make it difficult for individual investors. On the potentially negative side, if the money coming in is spent foolishly and investors are overpaying for assets, it can get you into bubble territory, but there's no indication that we're there yet. A handful of markets are a little bit frothy now—I don't know how long San Francisco can keep going at the rate it's been going in terms of price appreciation, and Austin and New York prices are pretty high, but we're not having the same kind of unfettered, unwise spending we saw in the last boom.

GlobeSt.com: What else should our readers know about foreign investment in US real estate?

Sharga: One of the reasons that US commercial real estate is so attractive to foreign investors is because it does represent one of the safer investment opportunities left. It's reasonably safe, and they will do whatever they can to protect that ecosystem—they're motivated, and their self-interest is involved in making the market stay healthy. We also have to remember that US real estate, as expensive as it is, is still a bargain compared to Hong Kong and Singapore—prices there are extraordinarily outrageous, so US real estate is a relative bargain.