AMERICAS NEWS: Chinese execution

Some US firms looking to do deals with Chinese capital were spooked by Anbang Insurance’s dropped bid for Starwood Hotels & Resorts following a fierce bidding war this spring, but that sentiment may be fading.

About 62 percent of readers indicated in an April poll that Anbang’s abrupt withdrawal damaged the reputation of Chinese institutions in the real estate marketplace. Since then, however, multiple groups have announced sizable US office acquisitions that underscore Chinese investors’ ability to execute deals. Will Silverman, head of investment sales at brokerage Hodges Ward Elliot, told PERE that Westerners may have painted Chinese investors with too broad a brush following Anbang’s aborted bid.

“People have a tendency to treat Chinese investors monolithically, and that’s a mistake,” Silverman said.

China Investment Corporation (CIC), for one, had been quiet in the US until this spring, when the firm first picked up a 52-story office tower in Chicago with LaSalle Investment Management for $539 million and then purchased a stake in a Manhattan office building in a deal valued at $700 million, according to local media.

China Life Insurance is likewise putting significant capital into the US office sector. The insurer led a consortium of investors that acquired a mixed-use Manhattan office and retail tower at 1285 Avenue of the Americas for $1.65 billion in May, according to real estate data provider Real Capital Analytics (RCA).

There is likely more investment to come. A recent report by the Asia Society said that Chinese capital bound for US real estate measured a record $8.5 billion in 2015, and the group predicted a total of about $58 billion will be deployed between 2016 and 2020.