Chinese real estate developer Shenglong Group has acquired a site in Los Angeles for $26 million as the Shanghai-based company prepares for its fifth overseas project.
The privately held company paid one of the highest rates ever for the 44,412 square foot (4,126 square metre site at the corner of Grand Ave and 12th Street near the city’s Staples Center indoor stadium, according to a report in the Los Angeles Times.
The Grand Avenue acquisition is Shenglong’s second project in Los Angeles, and its fifth overseas venture. The site is only a few blocks away from Beijing-based Oceanwide’s Fig Central project, and less than a mile away from Shanghai-based Greenland Group’s Metropolis project.
Converting an Industrial Area to Condos
Shenglong made this latest acquisition through its US-based subsidiary, City Century and intends to raze the warehouse currently occupying the site to construct twin condo towers.
The property is not currently approved for housing, but broker Mark Tarczynski of Colliers International, who represented sellers Rafi and Danny Shaoulian expect the city to approve a change in zoning for the property as the city is currently considered to suffering a condominium shortage.
Shenglong was advised on the transaction by brokerage CBRE.
Shanghai Developer Aiming for Four Continents
The Grand Avenue site is only two blocks away from Shenglong’s first US project, South Grand, which is located at the corner of Olive Street and 11th Street in Los Angeles’ downtown area. Shenglong made both acquisitions through its City Century subsidiary, which has lately been recruiting real estate development staff in Los Angeles.
In addition to its two US projects, Shenglong also has four developments underway in Australia through its Aqualand subsidiary. Three of the Australian projects are in Sydney, with the fourth in Perth.
The 15-year old company, which is controlled by tycoon Lin Yi and describes itself as one of China’s top 50 developers, says that it is also planning to open a branch in the UK.
In China, Shenglong has projects in Shanghai, Nanjing, Tianjin, Fuzhou, Zhengzhou and Luoyang and as of 2013 is said to have had projects totalling more than 30 million square meters and to have invested nearly $25 billion.
Downtown Los Angeles Attracts More Chinese Investment
Shenglong’s second LA project is the latest of a string of developments by Chinese companies in Los Angeles.
Beijing-based Oceanwide acquired the $200 million Fig Central project in December 2013, with plans to create a 223,000 square metre complex including a hotel, residential space and a shopping area. Earlier in 2013 Shanghai’s Greenland Group took over the $1 billion Metropolis project, also in LA’s downtown area.
A report last year by real estate consultancy JLL found that Los Angeles was becoming one of the top investment destinations in the US for Chinese companies. JLL’s research found that more than $780 million in Chinese investment was committed to real estate projects in America’s second largest city in just the first six months of 2014.