February 3, 2016
NEW YORK -- China's corporations have joined the country's wealthy elite in betting on the U.S. property market.
These companies are trying to keep the value of their assets from falling along with the yuan and Chinese stocks as the country goes through wrenching economic changes.
This luxury condo tower under construction in Manhattan is backed by a Chinese state-owned asset manager as well as other parties.
U.S. properties have become the safe haven of choice.
In Manhattan, the skyscraper-filled borough of New York City, a 61-story tower is under construction in the central business district. The luxury condominium project, which is to have about 90 units, is scheduled to be completed in the spring of 2017. Its penthouse will sell for $65 million.
Among the developers involved in the project are China Vanke, China's leading property developer, and China Cinda Asset Management, a big nonperforming asset disposal company owned by the state. The asset manager restructures bad debt acquired from institutions like China Construction Bank, then uses its profits to invest in U.S. properties.
The trend reflects a pivotal point in the global economy. Think of it: From where factories go, condominium towers come.
New York found itself on the receiving end of this new capital flow a few years ago. In the past year, Chinese companies joined individuals in sending their money New York's way.
Near Central Park, a 38-story luxury condo is being built by Hong Kong-based property developer Euro Properties. It will be the first property to be constructed in Manhattan by Chinese alone, a distinction that has made it a hot topic of conversation in New York real estate circles.
There will be more. Chinese investors now prefer to take part in real estate projects from the development stage and to target Chinese buyers.
"We are seeing less individual investors with the smaller numbers of $1 million to $3 million," said Edward Mermelstein, a New York-based real estate lawyer. "Now larger purchases on [the] institutional level with north of $10 million have significantly increased."
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