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By: Kun Zhao, Esq.
The second annual Chinese Investment in the U.S. Real Estate Forum is scheduled to be held on June 21, 2012 in Los Angeles, California. U.S. real estate professionals will gather there to address the latest trends and opportunities in China-U.S. real estate investments and transactions. Given the current drop in housing prices and a strong and rising RMB, Chinese investors have shown a greater than ever interest in the U.S. real estate market.
Chinese investors are increasingly targeting commercial properties in New York and New Jersey. According to a report, China’s HNA Group, which owns Hainan Airlines, acquired 1180 Avenue of the Americas, a 23-story office building in Manhattan for $265 million, and the luxury Cassa Hotel and Residences near Times Square for $126 million last year. Hong Kong billionaire Cheng Yu-tung’s family also invested in five U.S. luxury hotels in 2011, including Manhattan’s iconic Carlyle, for $570 million.
Chinese investments in New Jersey’s port area have been growing substantially as well. China is the largest source of goods imported through Newark, accounting for 27.8 percent of all goods entering the Port of New York and New Jersey. Chinese investments will continue to grow with the imminent widening of the Panama Canal, the expansion of the New Jersey Terminal, the dredging of New York Harbor and the raising of Bayonne Bridge. All these projects aim to substantially increase the New Jersey’s ports’ capacity to handle more containers. These projects will allow large cargo ships that currently anchor in California to sail directly to New Jersey, which would eliminate the need to deliver goods cross-country via trucking or railway. To Chinese companies, it means that a new distribution center in the east coast will be established.
Resonant with the port expansion in Newark, Chinese companies have invested substantially in in industrial properties near the Port of Newark. According to a real estate newsletter, last November, Sun Taiyang Co. signed a lease for a new 95,542-square-foot industrial facility in Moonachie. Early this year, Asian food distributor, Walong Marketing, renewed its 175,456-square-foot lease at 99 Caven Point Rd. in Jersey City. The facility has served as the company’s east coast distribution center for 10 years and Walong will stay in place for an additional 20 years. Currently, many Chinese companies are seeking to lease warehouses to handle their products. It is anticipated that these companies will need to acquire their own warehouses to accommodate their rapid growth.
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