The Wall Street Journal reported on September 20 that Chinese investors who once acquired American hotels, and office buildings had sold a net $23.6 billion of U.S. commercial real estate in recent years. And they are currently running for the exits.
According to data provider MSCI Real Assets, Chinese corporations have sold U.S. commercial properties for a net amount of $23.6 billion since the beginning of 2019.
This sale represents a significant turnaround compared to the last few years.
According to MSCI, between 2013 and 2018, Chinese companies were net buyers of roughly $52 billion in commercial properties in the United States.
Especially in Manhattan, Chinese purchasers often made headlines for paying top dollar.
Anbang Insurance Group acquired the famed Waldorf Astoria hotel in New York City in 2015 for $1.95 billion, the most significant price tag ever for a stand-alone hotel in the United States.
Joel Rothstein, chairman of law firm Greenberg Traurig LLP’s Asia real-estate practice, said that Chinese investment in American properties began to decline four years ago.
The drop came when Chinese regulators made it more difficult for many enterprises to transfer money outside the country.
Some of the most active buyers experienced financial difficulties. In addition, political ties between the United States and China also deteriorated, another drag on investment.
Jim Costello, the chief economist at MSCI Real Assets, said that Chinese firms never accounted for a large portion of total investment in commercial real estate in the United States. But they had an impact on prices in the market.
Costello said that by overpaying for properties, Chinese money trickled through the U.S. commercial real estate market, helping to push up values across the country.
This month, real-estate investment trust SL Green Realty Corporations took over the Manhattan office tower at 245 Park Avenue from its bankrupt owner, an affiliate of Chinese conglomerate HNA Group Co.
Other Chinese businesses are likewise cutting back. For example, developer China Oceanwide Holdings has lost a number of its American projects to its lenders.
Dajia Insurance Group Co. has tried to sell a multibillion-dollar hotel portfolio, which includes the Essex House hotel in Manhattan near Central Park.
However, Dajia Insurance Group’s agreements to sell the properties to South Korea’s Mirae Asset Financial Group failed during the pandemic.
Mr. Rothstein of Greenberg Traurig said, “Most of the deals that we’re doing with China-based investors these days are either workouts, restructures or exits.”
Cushman & Wakefield’s Doug Harmon said that while Chinese bids on American properties are now rare, Korean, German, and Singaporean businesses have filled the void.