New York will remain focus of investors: experts

As the Chinese increase real-estate investments in the United States, they are likely to continue to focus on major cities and metropolitan areas like New York, according to real estate industry professionals.

"I expect the Chinese to continue to focus on the gateway cities like New York, Los Angeles and San Francisco," said Michael Krupa, president of Gemdale USA, a unit of one of Asia's largest real-estate companies. "Those areas have and are likely to maintain strong fundamentals."

He made his comments at the 8th annual China Business Conference at Columbia University in New York on March 27. Krupa was part of a panel that explored the topic A Tidal Wave of Chinese Real Estate Investment.

Moderator Leanne Lachman, president of Lachman Associates, an independent real estate consulting company, noted that more than $40 billion of Chinese money has gone into commercial real estate with one-third in the US and most of that in New York City.

Omer Ozden, executive director of XIN Development, the US development arm of Xinyuan Real Estate Co Ltd, described a company development in the Williamsburg section of Brooklyn involving luxury condominiums. "We are building luxury for the local market and have sold over 70 percent of our units to local buyers," he said.

Ozden said XIN will continue to target New York and the other gateway cities. "I believe the Chinese will focus on these areas for at least the next 5-7 years" before turning their attention to other US areas.

Familiarity and the promise of a safe haven will keep Chinese money flowing into US real estate, said Dan Weil, CEO of Salmon Run Capital. "If the world is getting funky where do you want to put your money? The US is a safe investment haven," he said.

"New York City has and will remain the No 1 city for foreign real estate investment," added Louis Katsos, president of Jekmar Associates Inc, a consulting and development consulting company.

Lachman asked how this wave of heavy commercial real estate investing can avoid the same fate that befell the Japanese in the late 1980s and early 1990s.

"It's a different time period now," Katsos said. "The Chinese know that as the world gets more dangerous capital is coming to the US and especially New York City."

"The transparency of information due to the Internet will help the Chinese to make better decisions," said Dvorett.

Panel members also discussed the EB-5 visa program in the US. Lachman said that approximately 85 percent of EB-5 funds come from China.

paulwelitzkin@chinadailyusa.com