Chinese Real Estate Investments in Seattle See Sharp Decline in 2017

Nationally, the number of deals worth more than $1 billion were down 75 percent last year compared to 2016.

Chinese investments in the United States plunged 55 percent last year to $7.3 billion, according to real estate brokerage Cushman & Wakefield. Chinese investments in commercial property in Seattle fell 81 percent to $81 million in 2017. Investments in industrial property dropped 46 percent.

Investments in Seattle commercial real estate was down particularly sharply in part because of a relative dearth of large commercial deals of the kind Chinese investors have tended to prefer, said Gordon Ahalt, Senior Director at Cushman & Wakefield's Seattle office. Nevertheless, he said, Chinese interest in Seattle remains strong. "Because of the global demand on Seattle commercial real estate, it is very competitive when a large quality property comes to market.”

Nationally, the number of deals worth more than $1 billion were down 75 percent last year compared to 2016. By contrast, the total volume of deals under $250 million fell only 12 per cent. The investment drop was largely the result of stricter capital controls and regulations by the Chinese government. But the U.S. was hit harder than other markets, and was dethroned by Canada as the top target of Chinese investments. Singapore was the second largest destination, while the U.S. dropped to third place.

Chinese investors were involved in two of the top 10 deals in the U.S. last year, and investors continue to show interest in New York, San Francisco, Los Angeles, Chicago, and Seattle where three quarters of its capital has been invested. New York and San Francisco alone received two-thirds of every Chinese dollar.  Seattle's share of the total remained constant at about one percent.

Chinese investments in residential real estate in Seattle has also fallen but interest remains strong particulrly in Eastside markets, said Dean Jones, CEO of Realogics.  Interest is particularly strong among Chinese investors in luxury properties Jones said. He pointed out that the Asian Real Estate Association of America would be having its Global + Luxury summit in Seattle in early April.


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