Chinese Firms Flee U.S. Commercial Real-Estate Market After Big Property Bets Sour

Chinese firms for years were among the most aggressive buyers of U.S. luxury hotels, office towers and other commercial real estate. Now they are running for the exits, the Wall Street Journal reported. Chinese companies have sold a net $23.6 billion of U.S. commercial properties since the start of 2019, according to data provider MSCI Real Assets. That marks a dramatic turnaround. Between 2013 and 2018, Chinese firms were net buyers of nearly $52 billion of U.S. commercial properties, according to MSCI. Buyers from China snapped up aging U.S. office buildings, development sites and hotels, particularly in Manhattan, where they often made headlines for paying top dollar. Anbang Insurance Group acquired New York City’s famed Waldorf Astoria hotel in 2015 for $1.95 billion, the biggest price tag ever for a stand-alone U.S. hotel. “They seemed to have unlimited money and a huge appetite for special trophy assets,” said Doug Harmon, chairman of capital markets at brokerage Cushman & Wakefield. Chinese investment in U.S. properties started falling four years ago, around the time that Chinese regulators made it harder for many companies to move money out of the country, said Joel Rothstein, chairman of law firm Greenberg Traurig LLP’s Asia real-estate practice. Some of the most active buyers ran into financial trouble. Political relations between the U.S. and China also worsened, another drag on investment. Read more. (Subscription required.)
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