BY MICHAEL STOLER
Foreign investors, especially from China, are interested in owning commercial real estate in New York City. Last year, Chinese investors spent more than $3 billion in real estate assets in New York City, reaching record levels, nearly 43 percent more than they invested in 2013. Robert Knakal, chairman of New York Investment Sales, Cushman & Wakefield stated “over the next several years, we’ll see potentially, over $50 billion injected into the market from China.” The Chinese are seeking real estate in all asset classes including office, hospitality and land for residential and commercial development.
Last year, China’s Anbang Insurance Group, ranked as China’s second largest insurer with assets of $114 billion, set a record for the largest acquisition of a U.S. real estate asset by a Chinese buyer, with the purchase of the New York Waldorf Astoria for $1.95 billion. Another Chinese insurance company, the Sunshine Insurance Group Co. announced in February that it agreed to pay more than $230 million or more than $2 million per room, for Starwood Hotels and Resorts’ new Baccarat Hotel in Midtown Manhattan.
Chinese investors have been very active in acquiring property in Brooklyn. Construction is underway for the Oosten, a 216-unit residential condominium development located at 429 Kent Ave., between South 8th and South 9th Street in Williamsburg. The project is Xin Development International Group debut transaction in the U.S.
In July of 2014, Forest City Enterprises and Greenland USA, a subsidiary of Shanghai-based Greenland Group closed on a joint venture to develop Atlantic Yards (renamed Pacific Park ) a 22-acre residential and commercial real estate project in Downtown Brooklyn. Under the joint venture, Greenland USA paid approximately $547 million to acquire 70 percent of the project, not including the Barclays Center and 461 Dean Street, and will co-develop with Forest City Ratner Companies, the construction of 14 residential buildings with both organizations sharing in all project costs going forward in their ownership interests.
Late last year, the Bank of China, who has been very active in providing financing for large commercial real estate transactions agreed to pay $600 million to acquire the office building under construction at 7 Bryant Park. This transaction is the second major office acquisition by the Chinese investors when Fosun International agreed to pay $725 million in December 2014 for One Chase Manhattan Plaza, now known as 28 Liberty in Lower Manhattan.
In February 2014, China Vanke, China’s biggest publicly-traded developer, and the largest residential developer in the People’s Republic of China, in joint venture with RFF Holding and Hines broke ground on the 61 story residential condominium at 610 Lexington Avenue, adjacent to the Seagram Building between East 52nd and East 53rd Street.