?6 reasons Chinese money is raining down on Bay Area real estate

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Beijing-based Oceanwide Holdings has an agreement to purchase the site at fi for $296 million from developer TMG Partners and capital partner Northwood Investors LLC, according to a news release by the Chinese company. Oceanwide will pay hundreds of millions of dollars more to build the mixed-use development that will span 2 million square feet next to the future Transbay Transit Center.

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Cory Weinberg
Reporter- San Francisco Business Times


Chinese capital has started to rain down on U.S. real estate for the last couple years, and the Bay Area is getting wet.

The $296 million sale of the First and Mission Streets mega-development to Beijing-based Oceanwide Holdings, which I reported Wednesday, is one of the boldest moves by a Chinese developer in the Bay Area. The region has also seen notable Chinese investment in luxurious San Francisco condos, massive Oakland mixed-use plots and San Jose office towers in the last couple years.

[Click the photo to see a slideshow of some of the biggest deals.]

Chinese investors aren’t just interested in the region or the country because of our hot real estate market. They have spent more than $600 million on Bay Area real estate during the last two years, according to Real Capital Analytics, for reasons that are more complicated.

Here are six reasons why Chinese real estate companies want a piece of the action:

1) The Chinese real estate market is overheated

A report by Knight Frank says that Chinese investors have set their sights toward the western world mostly because their own residential market has cooled significantly. As a result, the value of Chinese investments in U.S. real estate grew from $600 million in 2009 to $12 billion in 2013.

That’s in part because the Chinese government has put cooling measures in place to weaken demand, while the amount of residential space that sits vacant has shot up 80 percent since 2010. Developers are now in “cutthroat competition” in China, forcing them to get creative for where they park their capital.

2) Chinese companies have more freedom lately

Cory covers real estate and economic development.

Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2015/01/bay-area-sf-real-estate-first-mission-china-invest.html

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