Chinese investment in New York real estate jumped 43 percent to reach $3 billion in 2014, but some experts predict the trend will go much higher still.
How much higher? According to Bob Knakal, Cushman & Wakefield’s Chairman of New York Investment Sales, mainlander appetite for New York assets could rise more than 16-fold before it peaks.
“Over the next several years, we’ll see – potentially – over $50 billion injected into the market from China,” the former head of boutique brokerage Massey Knakal, told the US press last week.
Knakal Already Experienced Selling to Chinese Buyers
Even before he sold his 200 person company to Cushman & Wakefield last year for $100 million, Knakal’s firm had brokered numerous commercial real estate deals involving Chinese buyers.
As early as 2013 Knakal’s company, which then specialised in New York commercial properties valued between $500,000 and $50 million, was selling assets to as many as 14 Chinese buyers per year, and in 2012 successfully brokered the first major sale of a New York project site to a Chinese developer when it sold a Brooklyn plot to Xinyuan Real Estate for $54 million.
Developers and Institutions Acquiring More New York Assets
Since that first Brooklyn deal three years ago, the flow of Chinese capital into New York property has only increased, marked by Anbang Insurance’s $1.95 billion acquisition of the Waldor Astoria hotel last year.
The biggest commercial acquisitions by Chinese buyers have come from insurance companies and other institutional investors, with the Bank of China acquiring a Manhattan office tower last year for $600 million, and rival Sunshine Insurance buying the as-yet-unopened Baccarat hotel in New York for $230 million in February of this year.
Wealthy Chinese Buying More High-End Manhattan Homes
Not all of the investments have been made by giant corporates or institutions, however, with wealthy Chinese accounting for some of the splashiest housing purchases America’s most expensive home market in recent years.
A co-founder of China’s Hainan Airlines has spent more than $94 million to buy two Manhattan condos in the last three months, and an unnamed Chinese buyer paid the highest price of the first quarter for a home in New York by purchasing a full floor Fifth Avenue apartment for $70 million during March.