Why China-US Real Estate Relations Will Last

Between 2010 and 2015, China has invested over $110 billion in residential and commercial sectors in the United States Real Estate Market, earning the country the title of Biggest Foreign Investor in the U.S.

There is an undeniable and growing influence China has on the U.S. economy. For example, China Life obtained a historical office building in New York City for $1.7 billion, and China Investment Corporation made a $700 million deal for a 49% stake in Brookfield Property Partners’ One New York Plaza office tower.

So what makes me so sure that this real estate relationship will go on for some time?

China’s Top Priority is U.S. Residential Deals

The amount that China is funneling into the U.S. Real Estate Market has been a huge cushion considering the housing crisis we endured before. It seems as thought they are aiming for specific, geographic locations like New York City, New Jersey, and Connecticut on the East Coast and Los Angeles, Orange County, and the entire San Francisco Bay Area to the West.

From 2010 to 2015, China invested a whopping $93 billion in residential real estate in the U.S.

Commercial Soon to Follow

The commercial and residential real estate markets function differently. In accordance with this fact, we can see why China invested only $17.1 billion in commercial property between 2010 and 2015. Half of those deals closed just last year. While residential properties bring in more capital, the annual development of commercial real estate purchases was up to 70%.

The Future is Bright

What can be expected in the future of U.S. – China real estate relations is that the gap between residential and commercial investments will reduce greatly.

Arthur Margon, a partner at RCG stated that “it depends on the government policy, both in China and in the United States. It is very unlikely, but it’s possible for the U.S. to develop policies that would make it more difficult for offshore investors to buy houses in the United States.

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