United States Of China: In Which States Is Your Landlord Most Likely To Be Chinese

Tyler Durden's picture

America's #1 landlord may be private equity giant Blackstone, but closing in rapidly is none other than America's very own arch nemesis and ascendent superpower, China. But while until recently China's grand ambitions on US multi-family housing had largely flown under the radar, the recent sale of the Waldorf Astoria to a Chinese company has finally put the US on "China is coming" alert... and reincarnated a lot of the same jokes that swept the country by storm in the mid-80s when it appeared Japan, itself nursing a massive asset bubble, would run over Manhattan (everyone knows how that ended).

As the WSJ reports, "big institutional Chinese investors who want global real-estate portfolios typically look for trophy projects in cities like New York, Los Angeles and London. Just this month, Hilton Worldwide agreed to sell its flagship Waldorf Astoria hotel in New York City to a Chinese insurance company for $1.95 billion—the steepest price tag ever for a U.S. hotel, brokers say, although it isn’t the highest on a per-room basis."

However, it isn't just New York: "Chinese investors with smaller war chests want to be seen as international property players too, and they have their eyes on other cities. Over the past two years, more have sought to invest in offices and hotels in inland cities such as Chicago and Houston in the U.S., and Madrid and Frankfurt in Europe, according to a recent report by property consultancy Cushman & Wakefield."

“Chinese investors are distributing their investments across the whole country, not only focusing on selecting assets in prime locations…but also paying more attention to cities with lower prices and greater potential,” said James Shepherd, Cushman & Wakefield’s head of research for Greater China.

Too bad for China, the opportunities that are left for it by Wall Street are those that by now are virtually assured a negative IRR. But then again it was never about the profit: for Chinese institutions, US real estate, just like for Chinese retail buyers of luxury properties, is all about laundering hot money and parking it in a place that is relatively amicable towards Chinese funds. Which the US is. For now.

So which states are most likely to see an influx of Chinese landlords in the coming months?

The consultancy compiled a list of the top 10 U.S. states for Chinese investment. Though the top spots are no surprise—New York, which claims the top spot with more than $6.7 billion in investment, has a lead of more than $5 billion over runner-up California—others are less obvious. Texas, which comes in at No. 4, benefits from Houston, which has become more familiar to Chinese investors in recent years. The country’s state-owned behemoth China Petrochemical Corp., known as Sinopec, has operations there, and the city gained recognition with Chinese investors with the help of former Chinese basketball star Yao Ming, who played for the Houston Rockets.

And visually:

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SafelyGraze's picture

US property = emerging market investment opportunity

 

CheapBastard's picture

Australia set to seize assets of corrupt Chinese officials Date -- October 20, 2014-- Philip Wen

 

Beijing: The Australian Federal Police are poised to seize assets of corrupt Chinese officials within weeks, in an unprecedented joint operation with their Chinese counterparts.

In an exclusive interview with Fairfax Media, Commander Bruce Hill, the manager of the AFP's operations in Asia, has confirmed Australia has agreed to assist China in the extradition and seizure of assets of corrupt officials who have fled to Australia with illicit funds running into the hundreds of millions of dollars.

The joint operation will make their first forfeiture of assets within weeks, having agreed on a priority list of alleged economic fugitives who have taken residence in Australia – identified by Beijing as one of the most popular outlets for corrupt Chinese money.

Among the suspects identified by the AFP are naturalised Australian citizens and permanent residents who for years have laundered money under the guise of being genuine investment or business migrants from China.

"They don't all of a sudden leave overnight and take a bag of money with them. In some cases they're very carefully planned," Commander Hill said, who explained that a typical scenario involves officials sending their spouses and children overseas, often using them as a conduit to shift assets offshore.


Read more: http://www.smh.com.au/world/australia-set-to-seize-assets-of-corrupt-chinese-officials-20141020-118kl3.html#ixzz3Gw8nRrJi

 

This could get very sticky for some of them.

quintago's picture

Cushman & Wakefield and RCA are a bunch of tools for publishing this misleading data. $44M is the total Chinese institutional investment in Washington State since 2008? That is the biggest crock of shit I have ever heard.

These numbers are way higher, both on the face, and for the fact that many overseas investors invest in the US through blocker corporations, who act as disregarded entities to those located in Cayman, BVI, etc. etc.

chumbawamba's picture

Notwithstanding the fact that $95 million buys a lot more real estate units in Florida than in California or New York.

I am Chumbawamba.

Vampyroteuthis infernalis's picture

If the Chinese want properties in New York or Cali, have them. Keep out of the fly-over states though.

Never One Roach's picture

I don't mind the Chinese doctors, engineers, etc coming over since they add to our society most likely. However, they can keep their corrupt officials; we have enough of those here already.

JohninMK's picture

Looks like the Chinese state has found a way to get its money back. Bet they hold onto most of them, bought at past years' asset values.

This action will have been heard around the world.

Expect future activity on this subject to be under the radar.

Freddie's picture

NY, CA, MD and NJ = the Chinese still long to live in police states. Just like home.

tiger uppercut's picture

I think you meant "respect your randrord!"

DeadFred's picture

Who would have thought that any state would have more than Cali?

LetThemEatRand's picture

Now I understand why Perry is wearing the glasses.  Texas makes the list.  Love you long time Lone Star State.

teslaberry's picture

new york state = brooklyn queens and manhattan and the near end of longisland .  that one small spot. there are chinese enclaves outside of the above areas, but most of it is there. 

OldPhart's picture

Once did a bit of research for mining rights near my dad's place out in the middle of pretty much nowhere...

Found his five acres on the assessor's records and started circling around on the property's that surround him.  I was very surprised to find so many asian names.  These are lands that haven't had a a footstep in over twenty years.

I circled out about two miles and, other than our quarry over the hill from him and our cluster of properties nearby, all that empty land was owned by asian names.

Empty, California Desert...I guess the equivalent in China/Japan/Korea of the Florida Swampland swindles.

Bangalore Equity Trader's picture

Listen.

Look out! OldPhart. Them their Chinamen are commin to get you rock&dirt guys.

Seriously. I wouldn't worry until they start to influence your CONgressmen.

From a geopolitical viewpoint that is what the big fuss is all about. The nice Jewish people who own your CONgressmen don't want any competition. They want to keep the cost of ownership "LOW". Once the Chinese get a chance to bid on the CONgressman it's all over for the Jewish and that means the Muslim will swamp Israel and end it.

dkny's picture

Reminds me of an old joke:

Tevya calls the local police station and says: "I've heard the jews have sold out mother russia".

The policeman on the other end affirms: "yes, it is true".

Then Tevya inquires: "if that's the case, where do I go to get my share?"

 

Alas, you seem to need a scapegoat to make sense of this chaotic world.

mkkby's picture

Let them buy the border states and turn it into a part of China.  Maybe they'll stop the illegals from entering the rest of the country.

FieldingMellish's picture

Don't be rate to pay lent.

SilverIsMoney's picture

I'm seriously LOLing but when they own this county it wont be as funny...

Moonrajah's picture

And just to think that in the 90-s the phobia was focused on Japan taking over. Anyone remember Rising Sun from Michael Crichton?

i_call_you_my_base's picture

Greater fools. Good luck.

Kirk2NCC1701's picture

Fut me!  I thought DC was the place.

But then, silly me, we all know who owns DC.

fibonacci's claus's picture

 so uncle sam made a deal with china to make american citizens pay off our debt to the chinese.  nice

Lynn Trainor's picture

You would think our government would have got a clue by now and slowed down on the over spending, but on and on they go like Thelma and Louise right over the cliff!!!  Fiscal INSANITY!

Lynn Trainor's picture

You would think our government would have got a clue by now and slowed down on the over spending, but on and on they go like Thelma and Louise right over the cliff!!!  Fiscal INSANITY!

malek's picture

So in 5.5 years Chinese institutional buyers bought $10 billion RE in all of USA?

Wow, that accounts for almost one drop of the Olympic size swimming pool!

Bangalore Equity Trader's picture

Listen Malek.

Do I have to remind you that you are on The Hedge?

reader2010's picture

Yeah, some really nice landlords are placing ads on Craigslist like this one:

 

https://farm8.staticflickr.com/7456/8724831160_b3a0f72b89_b.jpg

nakki's picture

10 billion is that it? Big deal, 6.7 billion in NY could be 100 penthouses.

gswifty's picture

Right! After all the huffing and puffing there's not a lot of ching in that chang.

sessinpo's picture

Reminds me of when so many thought the Japanese would own the US in the 1980s.

Grimnir's picture

Those people were idiots because America has had Japan by the balls since the end of World War II. You don't let your bound slave take over. When he misbehaves, a light spanking puts him in his place

China, on the other hand, as a country whose government does not at least on the surface appear to be a total US puppet, has a lot more freedom in this regard.

But hey, if people want to think "It didn't end up happening before, so that proves we're invincible", so be it. It just makes it all the more sweeter.

sessinpo's picture

The problem with your thinking and of those back in the 1980s is that to actually  enforce their land rights, they would have to go to war with ground troops. Otherwise it is the the court system.

Anyway, China  is as bankrupt as any other system as they rely on fiat just as we do. Enough said.

NOZZLE's picture

Dear Chinks, let me give you a few lessons in owning residential rental real estate. Lesson number one you can't manage residential rental real estate remotely from someplace else because your tenants are assholes no matter what income group they fall into and they will run over you like a welfare bumwas spotted a wallet on the street. lesson number 2 find yourself a good Mexican Janitor who will keep the riff raff out and maintain the building and of course the landscaping.  elevators lesson number 3 make sure you find an elevator mechanic who is willing to work on the side because elevator repairs will make the cost of repairing your Ferrari look like a bargain. lesson number 4 make sure you find yourself a corrupt real estate tax attorney otherwise the Cook County government will become your equity partner in your propertygood luck rice balls cuz you're going to need it

gswifty's picture

Oh lord, that's some hysterical truthiness right there. lol

ebworthen's picture

Yup, sold out, sold down the river.

fibonacci's claus's picture

 did you know it is illegal to say sieg heil in germany?  the socialists are as fascist as hitler was.

Karaio's picture

Jim Jones (Pastor) did that shit killing many people. 

Since that time the governments in Central and South America have created laws preventing foreigners from buying large areas. 

hehe.

stacking12321's picture

did he?

were you there?

it's funny when people regurgitate information that they are fed by the MSM as if they are facts.

Karaio's picture

@ Stacking12321: 

You do not know but, I'm Brazilian. 

Yes, I was at the time, I'm 52 years old. 

I'm used to here in ZH Trolls, you're just another jerk who encounter ahead. 

Mane! 

No hard feelings, you are not to blame for not knowing things. 

hehe.

Government needs you to pay taxes's picture

Let's see if the proposed NYC luxury tax on apartments valued over $5 million where the owner isnt a 6-month-plus-1-day resident has a chilling effect on Chinese ownership rates.

ImReady's picture

The Chinese should feel very much at home in those top 3 communist states... 

Bangalore Equity Trader's picture

Listen.

The Chinese that I know are more capitalistic than the 'mericans that I know.

How do you think they got soooo much "MONEY"?! They can buy up all your junk USSA Treasury debt and buy up your American shit real estate. No problem. LOL.

didthatreallyhappen's picture

so why are all of you gay Indians going to the USA?