Foreign investment in U.S. commercial real estate properties hit a record high of $92.4 billion last year, and many predicted that momentum to continue in 2016 as foreign investors looked for a safe haven for their capital. Instead, foreign investment has taken a sharp drop.

“The expectation going into the year was one that the trend and flow of capital would be there, and potentially increase in 2016, despite the dramatic jump in foreign capital that was invested in the U.S. last year,” says Riaz Cassum, a senior managing director at HFF, a provider of capital markets transaction services, in Boston. In fact, a 2016 report from the Association of Foreign Investors in Real Estate (AFIRE) found that nearly one third of its members planned to maintain or increase their investment in U.S. commercial properties this year.

Yet during the first half of the year, cross-border transactions totaled $23.1 billion—down 47 percent compared to the $43.3 billion in closed transactions that occurred in the first half of 2015, according to New York City-based research firm Real Capital Analytics (RCA). There are a multitude of factors contributing to the slowdown, ranging from general market volatility to specific issues that are impeding capital flows from some countries or regions specifically.

“It is a little difficult to put your finger on one particular thing, because there is not one particular thing causing this slowdown. It is a combination of events,” says Cassum.

Notably, new government restrictions in China have made it more difficult for both institutions and private investors to get capital out of that country. Chinese investment won’t be shut off completely, but the restrictions have definitely slowed momentum for what had been the single fastest growing source of foreign capital into the U.S., notes Cassum.

Slumping oil prices continue to impact Middle Eastern sovereign funds, and the recession in Brazil has also diminished investment capital coming out of that country. Canadians continue to be active, but are more cautious due to the perception that the real estate cycle is moving into a later stage.

Foreign investment activity is clearly down compared to last year, but it may not be as big of a drop as the numbers suggest, says Zeb Bradford, chief investment officer at Seattle-based Metzler Real Estate, an investment advisor that specializes in representing foreign investors in the U.S. real estate market. Metzler Real Estate is the North American affiliate of B. Metzler seel. Sohn & Co. KGaA, the oldest private bank in Germany.

The figures were somewhat inflated last year due to some large portfolio sales. That being said, there is a bit of a pause in the market that is due in part to pricing. Prices that had been on the rise for the past five years may have hit a peak around mid-2015, says Bradford. “I think pricing has taken a bit of a pause for most assets, and because of that, I think sellers also have taken a pause to understand where pricing is and either reset their expectations or their desire to hold for a bit longer,” he notes.

For example, Metzler assisted its client Union Investment Real Estate GmbH with the April acquisition of Boston’s 101 Seaport Boulevard. Union, which is one of Germany’s largest asset managers, acquired the 17-story office tower for $452 million or a record $1,027 per sq. ft.

Despite the slow start, foreign transactions could accelerate in the second half of the year. The Brexit vote and continued uncertainty in Europe are expected to funnel more investment capital towards the United States. Investors are concerned about the short-term outlook for real estate in European markets, and they are also looking for alternatives given the fact that many countries now have flat or negative bank rates across Europe. China is in the midst of an economic slowdown and Japan doesn’t have strong economic growth. So even though the U.S. may be moving towards the end of a cycle, economic growth is still positive and there are still good fundamentals in real estate, says Bradford.

Historically, about 10 percent of the capital coming into the market has been from foreign sources, and foreign capital represents an even larger component of the market for class-A properties in major metros at 20 to 25 percent, says Bradford. “Foreign capital has always been a very important component of the U.S. real estate capital markets,” he says. “But I think it is becoming a larger and larger player in the market, and I think that will continue."