Chinese Investment in NYC Decreased by Half

Chinese investment in U.S. commercial real estate is dropping.

High angle shot of New York City streets taken from the High Line on a cloudy day.

(New York, NY) — There’s a dark cloud looming over the heads of landlords.  With buildings to sell and China beginning to pull out of the market, days don’t look so bright ahead.

What happened?

Following many years of breakneck deals around the world, Chinese firms have begun to pump the brakes as their regulators restrict overseas investment.  The decision was made in an effort to cut speculative purchases and keep capital from streaming out of the country.

As the biggest beneficiary of China’s shopping spree, NYC will feel the hit.  In 2017, Chinese companies bought just $3.4 billion of properties, a 54 percent drop from 2016, according to a report by Cushman & Wakefield.

Chinese investors still around.

Though the spending has slowed, the shopping will continue, just more likely in different segments then before.  Investors will be shifting their purchases to those that receive government approval like logistical properties and student and senior housing, the brokerage said.

The Waldorf-Astoria hotel in New York.

In the past, Chinese investments helped restore real estate values to new records after the recession.  One deal that made headlines was the 2015 purchase of Manhattan’s Waldorf Astoria by Anbang Insurance Group Co. for $1.95 billion, the most that has ever been spent on a U.S. hotel.

Now however, they are looking to sell.  Another Chinese company, HNA Group Co., is seeking to sell U.S. properties including 245 Park Ave., a purchase made on the Midtown office tower over a year ago for $2.2 billion.

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