Chinese banks have poured more than $1 billion into real estate loans in New York City in the past year. Investors from China are snapping up luxury apartments and planning to spend hundreds of millions of dollars on commercial and residential projects like Atlantic Yards in Brooklyn. Chinese companies have signed major leases at the Empire State Building and at 1 World Trade Center, which is the centerpiece of the rebuilding at ground zero.
Delegations of Chinese officials and executives have been sweeping through the city, on a nearly weekly basis, assessing the markets, searching for office locations and meeting prospective partners and clients. Last month, officials and executives from China and the United States filled a ballroom at the Waldorf-Astoria to make deals during a business conference.
“Everybody wants to come to New York because New York is the starting point for going global,” said Xue Ya, president of the China Center, a business and cultural organization that was the first tenant to sign a lease at 1 World Trade Center, where it will occupy six floors. Once established in New York, Mrs. Xue said, “you are a player.”
Even one of the region’s fastest growing construction companies is Chinese. The company, China Construction America, has won contracts on major public works projects, including the Tappan Zee and Alexander Hamilton Bridges, the No. 7 subway line extension and the $91 million Metro-North Railroad station at Yankee Stadium.
China Construction is a subsidiary of a state-controlled construction company in China. The wave of Japanese investment in the city a generation ago — epitomized by the purchase of a controlling stake in Rockefeller Center by the Mitsubishi Estate Company of Tokyo in 1989 — stirred anxiety and even xenophobia. Some New Yorkers saw it as evidence that the city and the country were losing their dominant positions.
This time, city officials are welcoming Chinese investment as a boon to the local economy. But in a report in May, the Asia Society and the Woodrow Wilson International Center for Scholars warned that on a national level, protectionist impulses and anti-China sentiment, particularly in Washington, could scare away investors.
Flush with capital from its enormous trade surpluses, China has been on an investment spree, especially in developing countries. While the size of China’s investments in the United States pales in comparison with investments by other countries, it has nevertheless been growing rapidly.
In one of the largest loans by a single lender in the city since 2008, the Bank of China lent $800 million late last year to refinance a building on Park Avenue housing JPMorgan Chase and Major League Baseball, analysts said. Among other deals, the Bank of China recently agreed to lend more than $250 million to refinance an office tower at 3 Columbus Circle.
Tourism from China is booming in New York as well, helping to sustain the hotel, restaurant and retail sectors. In 2010, 266,000 Chinese people visited the city, a 45 percent increase over 2009, according to NYC & Company, the city’s tourism arm.
Pierre Gervois, president of China Elite Focus, said that “Five star hotels and luxury retail stores in Manhattan are suddenly realizing that they have no strategy to attract wealthy Chinese tourists. They turn to us to understand better this very sophisticated clientele”.
High-end real estate agents are doing their best to accommodate the influx.
Pamela Liebman, president of the Corcoran Group, said her firm had fielded a “huge” increase in inquiries from wealthy Chinese looking for luxury residential properties, “some in the $30-million-plus range.”
“We went from zero to 200 miles per hour in six months,” she said. “This year, it’s the biggest buzz word in real estate: ‘Chinese.’ ”
Xiaolan Shang, an agent with Prudential Douglas Elliman, said that five years ago, she had very few international clients. Now, about 90 percent of her client base is Chinese — and most pay in cash.
“I’ve had people come to New York only for the weekend,” Ms. Shang recalled. “They see the apartment, they make the offer and right away they fly back to China.” “Cash deal,” she added. “Right away.”
Source: New York Times, article by Kirk Semple