Joe Sitt thinks Chinese devaluation could boost NYC investment

“The smart ones will look at it as still early in the game,” Thor boss says

TRD New York /
Sep.September 09, 2015 06:30 PM

China’s recent currency devaluation had some real estate executives heralding a negative impact on New York real estate. But Joe Sitt isn’t having any of it. 

“In terms of the 10 percent devaluation making it more expensive to buy in New York, I’ve got an answer: what if the ultimate devaluation of the Chinese Renminbi is actually 30 percent?” Sitt, the CEO of Thor Equities, said at at New York Multifamily Summit Wednesday.

Sitt argued that the recent devaluation of China’s currency could be a mere first step in a series of further devaluations aimed at making Chinese exports more competitive and revive the economy. This, in turn, could cause Chinese investors to rush into dollar-denominated New York real estate before their renminbi-denominated assets fall further in value.

“While macroeconomic and political instability may make it a little scarier for foreigners to invest in cities like New York, the smart ones may look at it as still early in the game of the uncertainty in their local markets,” he said, at the summit hosted by Eastern Consolidated.

The People’s Bank of China, the country’s central bank, began devaluing the renminbi in early August, making U.S. real estate more expensive for those earning an income in Chinese currency. At the time,Terence Tang of Colliers International’s Singapore office told The Real Deal the added cost could lead to a slowdown in Chinese demand for New York properties. Other observers argued, like Sitt, that the prospect of further devaluations might actually encourage Chinese investment in the U.S.

David Dollar, an economist at the Brookings Institution and former U.S. Treasury emissary to China, took a third view. He recently told TRD that the 2 percent devaluation itself will not have a big effect on Chinese investment in the U.S. “The question is where the currency goes from here,” he said.  “There could start to be a devaluation trend but I do not think that is likely.”


Related Articles

arrow_forward_ios
Stefano Ricci, Joe Sitt and 118-120 Northeast 39th Street (Getty, Thor, Google Maps)

Thor Equities sues to evict Stefano Ricci from Miami Design District

Thor Equities sues to evict Stefano Ricci from Miami Design District
Michael Shvo, Thor Equities’ Joe Sitt, Wharton Properties’ Jeff Sutton and 530 Broadway

Michael Shvo closes on Soho retail building for $382M

Michael Shvo closes on Soho retail building for $382M
494 Broadway and Thor Equities' Joe Sitt (Credit: Google Maps)

Thor faces foreclosure on site where lender says it’s seeking “unrealistic rents”

Thor faces foreclosure on site where lender says it’s seeking “unrealistic rents”
Thor Equities' Joe Sitt and 725 8th Avenue (Credit: Google Maps)

Thor facing foreclosure at Theater District building

Thor facing foreclosure at Theater District building
Joe Sitt and 1725 Shore Parkway in Bensonhurst (Credit: Google Maps)

Thor sells Bensonhurst big-box store for $75M

Thor sells Bensonhurst big-box store for $75M
(Credit: iStock)

Here’s how Chinese real estate investors and NYC broke up

Here’s how Chinese real estate investors and NYC broke up
Thor Equities chairman Joe Sitt and 1006 Madison Avenue

Thor in danger of losing Madison Ave property

Thor in danger of losing Madison Ave property
545 Madison Avenue and Thor Equities' Joe Sitt

Thor Equities in hot water at 545 Madison

Thor Equities in hot water at 545 Madison
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...