LOS ANGELES—With Chinese investor interest in US commercial real estate running high—already, the year-to-date total of $4.1 billion in acquisitions surpasses 2014's 12-month tally of $2.3 billion, according to Real Capital Analytics data—the sudden devaluation of the yuan may come as an unwelcome bolt from the blue. It threatens to jar the momentum of investment from the world's most populous country; however, Rodney Ramcharan, newly appointed research director with the USC Lusk Center for Real Estate, tells GlobeSt.com that the government's action could spur investment here, at least in the short term.

“What's interesting is expectations,” Ramcharan says. “If you're a Chinese investor sitting on a lot of currency, and you see this kind of government-induced change in the exchange rate, you may anticipate that the government is likely to do a lot more of this in the next several weeks or months. As a hedge against that risk, you may decide to accelerate your portfolio's outflows, by buying safe assets.”

In the short term, he says, what could occur if you're an investor in, say, Beijing, “you may get a hit in your purchasing power, your ability to buy new assets. So we might still see an increased outflow from China into safe assets like housing as a hedge against future movement in the exchange rate.” He adds, however, that with the devaluation a recent phenomenon, it's too soon to tell.

Longer term, providing an accurate forecast is similarly problematic. For one thing, “the data in China are very opaque. It's very difficult to make sense of what's going on in terms of output growth and so forth.”

The devaluation took Ramcharan, and many others, by surprise; for the Chinese government to act as it did when it did “was not the expectation.” That being said, Ramcharan says, “The consensus view is that the Chinese economy is slowing, and the government wants to act on interest rates, on the monetary policy side. The challenge when you have a fixed exchange rate is that it's then very difficult to act on interest rates. That's a well-known problem. So what they're trying to do is devalue the currency to give them a little more scope on the monetary policy side. And of course, it gives them a tremendous advantage with their competition. They're able to export more.”

Of particular interest is that the euro has weakened against the dollar, and Chinese currency is pegged to the dollar. As a result, “some of the competitive advantage with respect to the euro has weakened over the past three or four years,” says Ramachan. The devaluation provides the government “a chance to rebalance the exchange rate in a manner that's more competitive.”

Further, on the part of the Chinese government this was “an unprecedented move. I don't think they've done this for many, many years.” Indeed, the government has come in for frequent criticism over the years with regard to the flexibility of its monetary policy.

That the government is devaluing the yuan “could signal that things are much worse than people think, or worse than the official data are showing,” Ramachan says. “It could be that fundamentals are weak, and therefore the outflow of capital could be much weaker than we think.” Officially, Beijing maintains that the country is continuing to grow at 7% annually.