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US real estate market gets boon

By <A class="" title="" href="http://usa.chinadaily.com.cn/opinion/chenjia.html" target=_blank>Chen Jia</A> | China Daily USA | Updated: 2014-03-31 10:58
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When Chris Cooper and his wife heard that a house next door to their home in San Mateo was for sale, they decided to take a look at it on its pre-opening day.

"I found I was the only non-native Chinese speaker in the house," said the Deloitte executive.

Cooper has been doing business related to China for 21 years, and recently made a keynote speech at an event focused on providing practical advice to Chinese companies who have invested or will be investing in US commercial real estate.

"We watch what's going in the macro-economy of China. When you watch the currency, you see RMB declined in value in the last four to six weeks," he said.

As the RMB declines in value, there is a pressure on the RMB, he said. "That is going to force the US real estate and commercial real estate sector to even get hotter."

Among the California real estate experts' circles, around $50 billion expected to be invested by the Chinese in overseas real estate in the next five years.

"There were $160 million in transactions our company concluded for Chinese investors in 2013," said Skip Whitney, executive vice-president and partner of Kidder Matthews, a China-focused cross-Pacific real estate group in San Francisco.

"Chinese investors have a hard time adapting to the US marketplace, while friends and family are not necessarily the best way to approach investment strategy," Whitney said.

He noted that the US real estate market has recovered and fewer opportunities are available. For example, residential real estate in the Bay Area has appreciated more than 50 percent, and commercial real estate from San Francisco to Silicon Valley has appreciated more than 40 percent.

"In 2014, Chinese investors have to compete with local rivals for US properties, the dollar is green, no matter where it comes from," he said.

Also, Chinese investors are used to taking their time and forging relationships because of "cultural differences" and the "language barrier", he said.

There was $12 billion worth of projects from Chinese investments in the US real estate over the last 18 months.

In 2014, Vanke teamed up with RFR holdings to build a 61-story residential tower in Manhattan. In 2013, Vanke formed a joint venture with Tishman Speyer to build two luxury high-rise condos of 642 units in San Francisco for $620 million.

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