China ranks first among foreign investors in U.S. commercial real estate market : C&W
Compared to other countries, China ranked first among foreign investors in commercial real estate within the U.S. in 2016., according to a new report from Cushman & Wakefield.
China inbound investment deal volumes have grown rapidly, reaching $19.2 billion USD in 2016, a record high.
Sixty-two percent of the investments, which equated to $11.9 billion USD, were deals over $1 billion USD. The five largest Chinese investment transactions were among the top ten largest transactions in the U.S. in 2016.
The U.S. East and West Coasts have historically been primary recipients of significant Chinese investment. These are also the most expensive markets in the U.S. The top 5 markets for Chinese investment are New York City (46%), San Francisco Bay Area (15%), Los Angeles (7%), Chicago (5%) and Seattle (2%). Chicago experienced significant growth, from $377 million USD in 2014 to over $1 billion USD in 2016. The top 5 U.S. markets made up 76% of the total investment.
The investment sources have become more diverse. Since 2012, Chinese insurance companies have been allowed by the China Insurance Regulatory Commission (CIRC) to invest in overseas real estate markets. China’s insurance industry is valued at approximately $1.83 trillion USD, according to figures from the CIRC. Only a fraction of funds are invested in U.S. real estate at this time. In 2015 and 2016, more than half of the investments came from Chinese life insurers.
Office and hotel investment remained the most popular investment assets, while industrial investment slowed significantly. Hotel investment was $8.6 billion USD in 2016, compared to $2.8 billion USD in 2015. The largest transaction in 2016 was a hotel deal from Anbang Insurance Group.