The Real Deal New York

Chinese investors sold $1B in US real estate in Q3

They were net sellers for the second straight quarter
December 06, 2018 08:30AM

Chinese investors offloaded more than $1 billion in U.S. properties in the third quarter. (Credit: iStock)

Chinese investors keep retreating from the U.S. real estate market.

They offloaded more than $1 billion in U.S. properties in the third quarter, the Wall Street Journal reported. Meanwhile, insurers, conglomerates and other big investors from the country purchased $231 million of property.

“This has to do more with a change in how capital is permitted to behave rather than Chinese investors saying ‘I don’t like the U.S.’,” Jim Costello, senior vice president at Real Capital Analytics, told the Journal.

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The Chinese government has tightened capital controls and put a damper on companies’ acquisitions abroad. Investors, as a result, have sold assets and made fewer deals abroad.

This marked the second quarter that Chinese investors were net sellers of U.S. property. The second quarter was the first time that happened since 2008. Ping An Insurance Group Co. of China and partners sold a 13-story Boston office building for $450 million, the largest sale by a Chinese investor during the third quarter, the report said.

Over the years, Chinese investors have spent tens of billions of dollars to buy U.S. real estate — sometimes well beyond market prices. Anbang Insurance Group’s $1.95 billion acquisition of the Waldorf Astoria in 2015 was the highest price ever for a U.S. hotel.

In New York, SL Green Realty bought a $148 million stake in HNA Group’s 245 Park Avenue. The struggling Chinese conglomerate paid $2.2 billion for the office tower in 2017, with $1.8 billion in debt.  [WSJ] — Meenal Vamburkar