China Leads Among Foreign Hunters of US Trophy Real Estate

Foreign purchases of trophy buildings in the US more than doubled during 2013, and the leading hunters of these high profile assets were from China, according to a soon-to-be released market survey.

Major acquisitions of landmark properties by investors such as Zhang Xin of Soho China and investment conglomerate Fosun made China lead all foreign countries as an investor into US trophy buildings with $1.4 billion in deals, while oil-rich Norway came in second place with $1.2 billion in deals, according to JLL’s Spring 2014 U.S. Skyline Review.

The report by the real estate consultancy found that foreign buyers actually outstripped domestic US investors by accounting for 50.2 percent of the purchases of trophy office buildings in the US’ biggest markets during 2013. The total value of foreign backed deals included in the survey, which covered 979 prime office properties across 43 US cities, reached $5.2 billion last year, up from $1.9 billion in 2012.

Buying the GM Building and Chase Manhattan’s Plaza

A group led by Zhang Xin bought the GM Building on New York’s Fifth Avenue

In June 2013 a group of investors, led by the family of Soho China CEO Zhang Xin, paid about $1 billion for a 40 percent stake in Manhattan’s GM building. The deal valued the GM building at US$3.4 billion, making the 50-story office building on Fifth Avenue the most valuable office building in the United States.

Zhang Xin’s Fifth Avenue investment was followed in October last year when Fosun International Ltd agreed to purchase the One Chase Manhattan Plaza office building from JP Morgan Chase for US$725 million.

Research by New York-based consulting firm the Rhodium Group found that US investment by Chinese companies reached $14 billion in 2013, up more than double from 2012, and predicted that growth in such deals would continue this year. Real estate is one of the leading sectors for such investment, according to the group’s research.