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Chinese firms bailing on US commercial market

Companies have sold $23B in assets since 2019

(Photo Illustration by The Real Deal with Getty Images and Americasroof at English Wikipedia, CC BY-SA 3.0 - via Wikimedia Commons)
(Photo Illustration by The Real Deal with Getty Images and Americasroof at English Wikipedia, CC BY-SA 3.0 - via Wikimedia Commons)

The turmoil in China’s real estate market is reaching the United States by way of foreign firms based in the global power retreating from commercial real estate.

Chinese firms have sold $23.6 billion in U.S.-based commercial assets since the start of 2019, the Wall Street Journal reported. The outlet reported data from MSCI Real Assets, which noted Chinese firms purchased $52 billion in those same assets from 2013 to 2018.

The troubles of prominent Chinese real estate developers is well-documented, one of several reasons for the shifting winds in the United States. Other factors include tension between the two nations, as well as recent Chinese regulation that made it more difficult to move money abroad.

Chinese firms don’t account for a large share of U.S. commercial investment. The moves of those firms, however, often made waves, creating an outsized influence on the market.

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Of the major bets from Chinese companies in the U.S., one of the biggest was Anbang Insurance Group’s $1.95 billion purchase of the Waldorf Astoria in Manhattan. The deal marked the biggest sale for a standalone hotel in the country, but building’s condo conversion is facing hefty cost overruns and problems aplenty as the process drags on.

Chinese-based Oceanwide Holdings bought the property at Manhattan’s 80 South Street in 2016 for $390 million. Construction never started on the planned 1,500-foot skyscraper, though. In the spring, the Financial District property went into receivership and the company lost control, leaving Oceanwide with only one U.S. project in its pipeline.

Chinese investor HNA Group recently sold 245 Park Avenue in Manhattan after a lengthy dispute with office landlord SL Green. Details of the sale were not disclosed, but HNA still owes SL Green a $185 million arbitration award.

HNA paid $2.2 billion for the 1.8 million-square-foot property in 2017.

— Holden Walter-Warner

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