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Chinese buyers may reshape California real estate

On Behalf of | Aug 25, 2016 | Commercial Real Estate |

In August 2016, research published by the Rosen Consulting Group, the Asia Society and other analysts revealed that Chinese investors had surpassed all other international players in the U.S. real estate market. Although a significant number of these investors spent their money on commercial deals that averaged around $1.5 billion in worth, businesses weren’t the only big targets for investment. In 2015, for instance, Chinese nationals paid more than $800,000 on average to buy homes in urban centers across the country.

Part of the drive to buy properties in the U.S. may be related to the popularity of EB-5 investor visas and vacation travel. While most foreign nationals view the U.S. as a good place to purchase second homes, others plan on participating in the resale and rental markets. Chinese hoteliers and hospitality brands may also establish more North American operations to keep up with new demand.

In the five years preceding the reports, Chinese investors accounted for some $93 billion in U.S. real-estate purchases. They also spent around $17 billion on commercial real estate. The most popular corporate deals involved companies that specialize in health care, technology, tourism and hospitality, and residential property. Experts say that although 2015 was a banner year for investments of Chinese origin, growth will still continue strong throughout the remainder of the decade.

Commercial property trends can have many varied impacts. Increased interest from foreign investors, for instance, might challenge domestic investors with heightened competition or offer unique chances to strike deals backed by global companies. In order to come out on top, investors may find it necessary to rethink their approach to negotiation. Having the assistance of an attorney could make it easier to structure smarter deals.