The Real Deal New York

In retreat, Chinese investors are now targeting more mundane US real estate

They've been net sellers for three straight quarters
January 29, 2019 08:35AM

(Credit: Pixabay and woodleywonderworks via Flickr)

The Chinese real estate selling spree continues to break records.

After being net sellers of U.S. real estate in the second quarter of 2018, which was the first time since 2008, Chinese investors have now gone three straight quarters selling more than they have bought, for the first time ever.

In fact, Chinese investors sold more real estate in 2018 than the previous seven years combined, according the Real Capital Analytics data cited by the Wall Street Journal.

As the Chinese government continues to tighten capital controls amid an economic slowdown and growing uncertainty over trade, Chinese companies have been selling off many of the trophy assets they acquired over the past few years, and analysts expect the trend to continue in 2019.

Anbang Insurance Group is looking to offload a $5.5 billion hotel portfolio including properties in New York, Chicago, and San Francisco. Wanda Group recently offloaded a massive development in Beverly Hills, and is looking to sell a majority stake in Chicago’s Vista Tower as well. (It’s worth noting that Anbang held onto the Waldorf Astoria, while HNA Group held onto a controlling stake at 245 Park Avenue.)

Chinese investors would have been net sellers for the entire year if it weren’t for the $11.6 billion sale of Global Logistic Properties to a Chinese consortium, which closed in 2018.

Those Chinese investors who have continued to buy in the U.S. are pivoting away from trophy assets towards more mundane properties. For example, China Life Insurance recently acquired an 80 percent stake in a portfolio of shopping centers in Georgia and South Carolina for around $607 million. [WSJ] — Kevin Sun