Despite Chinese investment in U.S. real estate declining 55% after the advent of strict government regulations on outbound investment, Chinese capital markets remain keen on five core markets. New York, San Francisco, Los Angeles, Seattle and Chicago will continue to benefit from Chinese investment even though the overall amount in each city will be much less, according to a report from Cushman & Wakefield.
New York, San Francisco and Los Angeles made up 72% of deal volume from Chinese investors in 2017, according to Cushman & Wakefield Senior Managing Director, China Direct Investment Xinyi McKinny. Chinese investors have historical ties to these cities and many prefer to invest large amounts of money in cities with which they are familiar, she said.
“Over the years they will start to look at other cities,” she said. “Culturally, they are not familiar and … not comfortable with secondary and tertiary markets.”
Cities such as Washington, D.C., Houston, Dallas and San Antonio are starting to pique the interest of investors, according to the report. McKinny said investors are starting to consider Austin and Denver, but Chinese investors will remain committed to the markets they know well.
