European real estate investors and lenders consider Los Angeles and California as the most attractive city and state to invest in, according to a survey released Tuesday.
The preference and optimism about Los Angeles and California expressed by European firms were comparable to similar assessments by Japanese firms, which Mead Ventures Inc. surveyed on the same questions six months ago.
The European firms also said they did not expect events in Eastern Europe or the unification of the European Community in 1992 to have any effect on their activities in the United States, according to the survey by Mead Ventures. The Phoenix firm surveyed 115 American subsidiaries and branch offices of European real estate companies.
"To me the interesting thing about these Europeans . . . they are designating Los Angeles as an international city of the first rank, like New York City, London or Paris. Whereas in the past, most Europeans and maybe most Americans, too, have maybe thought of Los Angeles as one rank below New York in international appeal, attractiveness and cachet," said Christopher Mead, president of the business information firm.
While the European firms listed Los Angeles as the most attractive U.S. metropolitan area and California the most attractive state, the survey fell short of measuring their actual plans for the real estate investment activities in these specific areas. San Francisco ranked as the fifth most attractive U.S. metropolitan area.
Although the U.S. government tracks foreign investment by different countries (Britain is No. 1), it does not break out the data by type of investment or by state.
"We know that the Europeans have a significant investment," said Jack Kyser, chief economist at the Los Angeles Area Chamber of Commerce. "We forget that Carnation is owned by Nestle, Baskin Robbins by Allied-Lyons PLC, and British firms also are active in the entertainment industry."
He also noted that Volvo has a marketing and design facility in Camarillo and Volkswagen has a facility in Westlake Village. "Mercedes has an advance man scouting because they need one here, too," said Kyser. While he conceded the lack of specific data on European investment in the area, Kyser said the importance of Los Angeles to West Germany is seen in the trade flow. The Los Angeles Custom District shows trade with West Germany at more than $3 billion a year.
Kyser said his office has been receiving an increasing number of calls from the local consulate offices and trade missions of European countries seeking economic information about Southern California. "Japanese activity has sort of fallen off; it's definitely European now."
He believes that some European firms may be increasingly attracted to Los Angeles as a connecting point with countries in Asia. "The idea is you can do business with London, Paris or Berlin in the morning and in the late afternoon you can do business with Tokyo. It's a good halfway point."