Beijing-based developer Xinyuan Real Estate recently purchased a 2-acre lot in Brooklyn, New York for US$54.2 million, setting a record for US-based acquisitions by Chinese real estate firms.
The purchase, which was made last month, was of a site in the Williamsburg section of Brooklyn, near the city’s waterfront, which is slated to allow for more than 200 residential units. According to data from Real Capital Analytics, the take over of this site was the first purchase of a site by a Chinese company to comprise more than a few units.
According to comments published in Bloomberg, Tom Gurnee, Xinyuan’s Beijing-based CFO said that the company plans to market the units as condominiums. Many Chinese investors interested in US real estate are focussing on US cities that appeal to mainland Chinese residents such as New York, Los Angeles, San Francisco and Miami.
Xinyuan has built more than 2 million square metres of housing in cities such as Hefei, Zhengzhou and Chengdu in China. However, since the Chinese government began restricting home purchases over the last two years, many Chinese private individuals and corporations have begun to look for real estate deals overseas.
Omer Ozden, a Beijing-based lawyer who advised Xinyuan on the purchase was quoted by Bloomberg as saying,
“This year, there’s been approximately $9 billion-plus invested from China into the United States real estate market, and it’s been almost all individuals, typically individuals buying up one, three, five homes at a time,” Ozden said, citing data from the National Association of Realtors. “There’s a massive opportunity here.”
Xinyuan had already made two smaller investments in the US earlier in 2012, and according to Gurnee, the company will continue to look for deals on America’s East and West Coasts that are “offered at favorable prices and that are attractive to potential buyers from China.”