Chinese investors are dumping their commercial real estate investments, a casualty of the escalating trade war between the U.S. and China.

According to an article in the Wall Street Journal, Chinese investors sold $1.29 billion of U.S. CRE in the second quarter, while purchasing only $126.2 million. This is the first time the cohort has been a net seller since 2008.

Chinese activity in the CRE space has been a big factor in boosting prices for U.S. commercial properties across the board.

Experts point to the trade war as the direct reason for the massive and swift Chinese divestment.

Not every Chinese investor is under pressure from Beijing to sell, though. Many owners of smaller residential projects, warehouses and senior living centers are holding on to their properties.

Chinese investors are trying to minimize losses from these abrupt sales, and the government has allowed investors to start the divestment process by selling properties that have increased in value.

But a breakeven can be difficult to attain since many Chinese investors bet big on flagship properties to boost brand recognition and increase their clout.

From the article: 

Chinese investors had their own reasons for paying top dollar. Some of the executives running these firms felt that controlling trophy properties conferred prestige on their owners and built their brand recognition for future expansion, analysts say. A number of Chinese investors also planned to hold these properties for several decades, so they were not worried about prices falling in major markets like New York, the analysts add. For many Chinese firms, that long-term timetable has been scraped after the government began pressuring companies to reduce their debt levels and to reduce credit risk in the banking sector.