Missing Chinese Investors?

Central government in China holds little sway over local government entities, especially in fairly autonomous areas like Shanghai. I don't know the specific guidance given for off-shore transactions but I am sure it is case by case and may depend on whether the capital is already off-shore. The reported crack down on companies investing in off-shore transactions may depend more on reputation and political influence than anything else. China wants strong economic growth so will not reject capital investments that make economic sense.

You have to wonder what's going on in the minds of these major developers selling off huge chunks of their projects.

I think they know more than we do that new ultra-luxury is over supplied. They are just being smart about it.

Btw, 91 Leonard is not ultra-luxury. Toll Brothers is very prudent due to discipline of being a public company.

https://therealdeal.com/2017/11/22/chinese-buyers-flock-to-london-office-market/to

Yes, 30, there are still a lot of Chinese investors in the market. A major example of too much capital flowing to real estate. Asian investors don't trust their own stock markets and are already over-invested in their real estate markets. To them, buying in New York or London is a way to diversify.

I think that the biggest problem in real estate markets worldwide is the amount of excess capital in the economy. No way this does not end badly for many.

I seriously wonder if the announced pull-back of Chinese investment in overseas markets is partly a ploy to get sellers to lower their expectations?

https://therealdeal.com/2017/12/12/the-long-view-hna-anbang-and-the-myth-of-low-leverage/

Great article that highlights a number of issues with foreign investment in the US, lack of transparency being just one. Wanda is the world's largest real estate developer and a public company but it is closely held and the fact that S&P rates its debt as junk is stunning. Same with Fosun who I think may be still the largest private company in China.

There is a "follow the leader" mentality with Chinese institutional investors where the bigger firms set the market and the others follow. Smaller firms take confidence from larger firms due diligence and price off them. Extrapolate to the resi market and one can see much risk if more Chinese withdraw.

Real Capital Analytics says Chinese money accounted for 20 percent of Manhattan commercial property sales. I assume this is by % of aggregate sale prices. Not sure the % of the resi market but if similar to 20%, this is not a good sign IMO.

I think resi money in individual apartments is much more value conscious (leaving aside the ultra-luxury) that institutional money in commercial projects.

Btw, the article 30 posted is very good. Most articles do not address the source of funding for large Chinese investors like HNA and how dependent their existence is on being on the right side of the Chinese govt. Thank you.

300, I agree that individual investors are more price conscious especially at the lower end of the low-middle of the price range. This article suggests what I believe that the amount of hidden debt held by Chinese investors is quiet high. This I believe is true for institutional investors like Wanda and Fosun but also individual investors in the resi market using unsecured debt and shadow banking debt originating from China. Defaults are increasing and we may never know the extent of such debt on NYC real estate until we see properties being offered for sale or reported sold.

Who would have thought about $35mm debt on 157 west 57th street foreclosure? You are right, you never know.

It seems like there are a lot less Chinese buyers in the market these days, especially in the highrise Midtown condos. Anyone else seeing this? For example, eerily quiet in the condo towers in Midtown West.

Many Chinese do their homework and read research reports on the market just as we do. It's no wonder interest in apartment investment is declining, especially if one seeks a good ROI.

I think its a bit of good news, bad news when looking at foreign investment in NYC. Good that it has raised valuations for those who already own, bad for those who seek to buy and achieve a strong ROI.

I (and others) often say that one cannot time the market. But in reality, its not always that difficult to know when to invest and when not to. For example, right now.

Very interesting, so it's really a dichotomy between the equity markets and NYC real estate then .. and bitcoin heh.

It's annoying in NYC though that when prices decline, it really doesn't because most ppl refuse to just sell. So then there's just this annoying stretch of inactivity...

Interesting report from Cushman on Chinese outbound investment in commercial real estate in various countries and US cities. New Chinese government measures for outbound transactions became effective on March 1, 2018. For NYC, investment from China and Hong Kong was down 54% in 2017 and down 80% for hotel deals.

https://cushwake.app.box.com/s/05ifqemsxjy51lxj0ak42vh85xir55g5

Good report indeed. Thank you Ximon.

Chinese money all but disappearing from the NY market isn't going to help things any:
https://www.ft.com/content/3c5d0292-8c50-11e9-a1c1-51bf8f989972

I think Chinese money has been the leading edge of irrational exuberance in most major property markets. Having them disappear removes a major source of support for NY.

Heard the Chinese money moved to Queens and Long Island

I'm with thoth 100%

Just for fun -
https://www.youtube.com/watch?v=oqd4KMwOlxA