Wednesday, October 28, 2015

Chinese Developers see potential in US Real Estate Investments

Chinese developers are turning to US real estate investments as an alternative to investing in China. The real estate markets in major markets such as New York, Los Angeles, Chicago and San Francisco are most popular to Chinese. These urban cities have seen a flurry of investment from large Chinese developers. We expect to see smaller and middle size Chinese developers to follow their lead. Here is a list of recent investments by Chinese developers into US.
  • Fosun International’s $725 million purchase of 1 Chase Manhattan Plaza in New York City was the biggest foreign investment in commercial office space in 2014.
  • Zhang Xin and Pan Shiyi partnered with Brazilian banking magnate Moise Safra to take a 40 percent stake in the General Motors building in NYC for $700 million.
  • Wanda Group owned by China’s richest man Wang Jianlin, purchased AMC Cinema chain for $2.6 billion in 2012. They also spent $900 million on a 90-percent stake in a Chicago mixed-use development in 2015 with recent news to develop a 93 story Wanda Vista Tower in downtown Chicago.
  • China Vanke, China’s largest residential developer, will develop a four-building, 656-unit condo development in San Francisco called Lumina in partnership with Tishman Speyer.
  • Xinyuan, founded by Zhang Yong, bought land in NYC for $54 million following successful projects in Nevada and California. It recently announced its fourth investment project in Manhattan.
  • Landsea is investing $1 billion in the U.S. housing market building condominiums in San Francisco, Los Angeles and New York City markets and exploring Washington DC and Boston markets.
  • Shanghai-listed Yantai Xinchao Industry Co. will buy Ningbo Dingliang Huitong Equity Investment Center, an investment company owning oil properties in West Texas valued at $1.3 billion.
  • Greenland Group is developing $1 billion development near downtown Los Angeles including a metropolis hotel, condominium and shopping complex.
  • Shenzhen Hazens bought Luxe City Center hotel and two adjoining lots for $105 million in downtown Los Angeles. The company is looking at a $250 million development costs.
  • Oceanwide Real Estate Group is bought land in downtown Los Angeles looking to build 3 40 story towers with condominiums, hotel rooms and nearly 167,000 square feet of retail space. 
  • Gemdale Corporation, one of China’s largest blue chip real estate developers, to co-develop a $125 million mixed-use project in Hollywood, which will be the first real estate investment in Hollywood by a major Chinese company.

We continue to see the trend of Chinese developers investing into US real estate. Join us in Los Angeles on January 20th at the Chine Private Equity Forum to discuss the investment process and how to partner with Chinese developers.

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