Blanca Torres
Reporter- San Francisco Business Times
Chinese money has flooded the Bay Area real estate market — and you can expect more, way more.
Investors in Asia have plenty of reasons to put their capital in the United States and with our economy still recovering from the 2008 recession, domestic capital for projects is still relatively hard to come by.
On Wednesday, developers of Oak to Ninth in Oakland’s Brooklyn Basin announced a $1.5 billion commitment from a Chinese investor making it the second, large-scale, master planned development project to secure funding from the far east after developers for Treasure Island announced a similar agreement late last year.
Other examples include a Chinese biotech firm buying the former Berlix factory in Richmond and the San Francisco Regional Center funneling Asian money into Oakland deals to buy office and industrial buildings.
Those deals are just a sampling, or a harbinger of what’s to come.
In the case of Oak to Ninth, the investor, Zarsion Holding Co. is an expansive owner developer and owner of real estate in China and the Oakland investment is their first in the United States.
Anton Qiu, a veteran broker with TRI Commercial, told me that this kind of deal is appealing to more Chinese companies and investors for a variety of reasons.
At the macro level, China holds more than $1 trillion of U.S. debt, but the dollar has been weak since the recession, so investing in assets is much more attractive. In the last few years, the Chinese government has made it easier for investors to borrow money from the government to invest in foreign countries. In the U.S., the motivation is clear — the better our economy, the more the dollar and thus, the value of China’s holdings go up.
Blanca Torres covers East Bay real estate for the San Francisco Business Times.
Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/04/why-chinese-money-is-flooding-bay-area.html