New York City is no stranger to foreign investment. Foreign investors have been pouring money into high quality New York properties in recent years. They believe that investments in the city are safe long-term bets, and that higher-end buildings will see values grow faster than less-flashy buildings. Chinese investors have, for the most part, stayed out of these real estate plays.
Recently, however, they have started to become more aggressive. This could be because real estate markets in China have recently started to show signs of weakening. In 2012, Chinese investors had only spent roughly $300 million. Since early 2013 they have spent more than $5 billion on New York properties.
Another interesting aspect of these investments is that they have typically been high-profile. In 2013, Beijing-based developer Zhang Xin purchased a 20% stake in the General Motors building. This building is the country's most valuable single tower.
So far, the New York region has accounted for 78% of Chinese investments in U.S. commercial property between the years 2007 and 2013. Only time will be able to tell the long-term effects these trends will have on real estate markets.
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