![]() ![]() Overall, New York’s real estate saw $14.3 billion in Chinese investment in 2016, a sizable chunk of the $33 billion poured into U.S. While the Chinese government appears to be more focused on megacompanies, individuals are also being impacted.įor the wealthiest of buyers - including some who’ve purchased multimillion-dollar condos in New York’s most prized trophy buildings, like 432 Park and One57 - the capital controls are a mere speed bump.īut that class of uber-wealthy buyers, which fueled the latest condo boom, has been followed by a new wave of purchasers from China who’ve been later to the game and might not have the resources to get their money out of the country. There were a mere two Manhattan commercial property sales to Chinese buyers during the period, down from eight a year ago. Sources say the company, which is traded in Hong Kong, likely had its money out of the country before the latest controls took effect.Īnd although the dollar volume of Chinese investment in Manhattan commercial real estate rose slightly in the first four months of 2017 - up to $2.3 billion from $2.1 billion during the same period a year ago - that number is skewed by HNA’s Park Avenue deal. And last month the company bought art heir David Wildenstein’s townhouse on the Upper East Side for $79.5 million - marking the priciest New York townhouse ever sold. In March, the Chinese conglomerate HNA Group went into contract to buy the high-profile office tower at 245 Park Avenue for $2.21 billion. That doesn’t mean that big deals involving Chinese players have come to a complete standstill. “There are larger deals that were effectively halted and a few deals that got killed,” she said. Wendy Cai-Lee, a former executive at East West Bank who recently left to start her own debt and equity fund Oenus Capital, said the impact that the latest capital controls have had on cash flow to real estate deals in the U.S. Projects throughout the city are already feeling the squeeze, and both the residential and commercial sectors are softening. Not only has the industry become heavily dependent on Chinese investment, but the real estate market here is at a less than optimal point. ![]() Meanwhile, commercial executives in New York said they’ve seen fewer Chinese institutions bid for trophy properties, while fund managers told TRD they’ve had difficulties raising money in major Chinese cities such as Shanghai and Beijing.įor New York, all of this amounts to some very unpleasant withdrawal symptoms. Residential brokers interviewed by The Real Deal said that in the last few months, some Chinese buyers have been unable to access their own cash - making it difficult for them to close deals. The latest of those controls, which took effect in late 2016 and at the beginning of 2017, have had a quiet but significant ripple effect across the NYC market. Those regulations have lowered the ceiling on how much money Chinese individuals and corporations can invest abroad. Since the end of 2016, Chinese regulators have rolled out a series of capital controls and other directives to help stabilize the country’s weakening currency and promote investment within China. ![]() ![]() And that crackdown is now threatening the flow of cash into New York’s real estate market, among other U.S. But in hindsight, it seems more like a foreshadowing of something bigger and more economically ominous: a regulatory crackdown by Beijing on capital leaving China. Starwood ultimately sold to Marriott as originally planned.Īt the time, the failed deal seemed - at least to those not familiar with Chinese domestic policy - to be a case of an unpredictable investor stretching beyond its means. And sure enough, on March 31, Anbang withdrew its bid without explanation. ![]()
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