A changing economic picture brings new perspectives. A few years ago, Japanese investors with big bucks began snapping up US real estate at ferocious rates and raising fears that Asian investors would end up owning the country. Now, though, as Chinese investors take the lead in foreign investment in US real estate, a shaky housing market is welcoming the new buyers with open arms.
What’s different this time around? A struggling housing market and a sluggish economy are ready for new money and new growth, and Chinese investors can provide both. A recent New York Times Article pointed out that the Bank of China is now the largest foreign lender in US commercial real estate, and the Chinese government holds over $1 trillion in US Treasury Securities.
Chinese investors are dropping big money into commercial real estate, with purchases including office complexes and commercial parks around the country. But they’re also funding new construction for commercial projects, and partnering with US investors and consortiums from other parts of the country to back a variety of development deals and purchases both large and small scale in markets around the country.
Though much of the Chinese investment funding goes to commercial real estate, a sizable portion is also being directed toward home buying, particularly in higher end markets around the country, and in building new apartment complexes and condos in desirable areas as part of joint ventures with other foreign investment groups.
Foreign investment depends heavily on what happens at home – and a different climate in Beijing could change the picture of Chinese investment considerably. But for now, Chinese investors are putting their assets into many markets and many kinds of projects – a strategy of diversification that, as Jason Hartman says, is the recipe for real estate success. (Top image: Flickr/yakobusan)
Background:
Creswell, Julie. “Chinese Investors Pursue US Property Deals.” The New York Times. NYTimesOnline. 23 Jul 2013.
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