Chinese investment in the US dropped 80% last year following new outbound capital restrictions from the Chinese government. In Los Angeles, which saw a majority of the Chinese investment in the last three years, the abrupt decline in investment activity could mean a local pricing correction, according to Greg Karns, a partner at Cox, Castle & Nicholson and an expert on Asian real estate investing. Karns says that we haven't seen a pricing correction yet, but the timeline for transactions has gotten longer. With interest rates expected to rise, Karns says that this year could be a turning point. We sat down with Karns for an exclusive interview to talk about how the pull out of Chinese investment is affecting the commercial market in Los Angeles and what a pricing correction could mean for the market.

GlobeSt.com: Los Angeles has seen a strong amount of investment activity from China. How do you think the decline in Chinese investment will impact the Los Angeles market?

Greg Karns: It is interesting because it would make sense that if you take the investors out of the market that are setting the top of the market year-in and year-out, then there would be some market adjustment. I am not sure that we have seen it yet. I think that most real estate people would say that it was better to be a seller last year than this year. Other than assets not moving as quickly, I haven't seen a change in pricing. I have seen a reduction in the number of new acquisitions and financing from Chinese banks in terms of the number of loans.