u.s. real estateThe great wave of Chinese investment in U.S. real estate has slowed to a relative trickle, a new study revealed. Real estate firm Cushman & Wakefield reported on Tuesday that investment from China in U.S. real estate plummeted by 55% in 2017. The precipitous drop—from $16.2 billion in 2016 to $7.3 billion last year—is the direct result of the Chinese government’s decision in August to restrict foreign investment by its citizens.

According to the Cushman & Wakefield study, China now ranks third among foreign investors in U.S. real estate behind Canada and Singapore. The biggest declines by Chinese investors came in “megadeals” and hotel acquisition volume. The report found deals worth at least $1 billion fell by a whopping 75%, compared to only 27% for deals valued at under $1 billion.

In the Los Angeles metropolitan region, U.S. acquisitions by Chinese investors declined by 67% percent last year, higher than the national rate. But while the tide has definitely turned, boom times aren’t completely over. One source told the L.A. Times that while things have definitely slowed, Chinese investors already established in Southern California “remain active pursuers of large high-profile offerings in the region.

“We still expect Chinese capital to flow into Southern California, albeit at a reduced and slower pace in the short term,” said Jeffrey Cole, property broker at Cushman & Wakefield.

2018 Outlook

The report concludes restrictions from the Chinese government will continue to be a drag on overall transaction activity this year. However, given the strong U.S. economy, along with the safety and diversification benefits of it commercial real estate markets, it will continue to attract Chinese capital. But it will be in different areas. The study predicts investment activity will favor deals most likely to receive state approval. These include logistics entities and properties, R&D facilities, as well as student and senior housing.

You can read the full report here.