Chinese Investment May Be Down In U.S. Real Estate, But Investors Still Love These Cities

Despite Chinese investment in U.S. real estate declining 55% after the advent of strict government regulations on outbound investment, Chinese capital markets remain keen on five core markets. New York, San Francisco, Los Angeles, Seattle and Chicago will continue to benefit from Chinese investment even though the overall amount in each city will be much less, according to a report from Cushman & Wakefield. Unsplash/Thomas Harbor New York, San Francisco and Los Angeles made up 72% of deal volume from Chinese investors in 2017, according to Cushman & Wakefield Senior Managing Director, China Direct Investment Xinyi McKinny. Chinese investors have historical ties to these cities and many prefer to invest large amounts of money in cities with which they are familiar, she said. “Over the years they will start to look at other cities,” she said. “Culturally, they are not familiar and … not comfortable with secondary and tertiary markets.” Cities such as Washington, D.C., Houston, Dallas and San Antonio are starting to pique the interest of investors, according to the report. McKinny said investors are starting to consider Austin and Denver, but Chinese investors will remain committed to the markets they know well.  While there may be few opportunities to make purchases in multiple markets, some Chinese investors like HNA Group and Dalian Wanda have been under pressure by the Chinese government to sell their real estate. HNA Group said in February it plans to shed up to $4B in properties in New York, including the recently purchased 245 Park Ave. HNA also is in talks to sell off its stake in Park Hotels & Resorts, a spinoff of Hilton. Gaw Capital Partners, a Hong Kong investor that does not fall under the same restrictions, has been actively buying up properties in New York and San Francisco, including ones sold by HNA Group. Check out how each of the top cities for Chinese investment performed below. New York