Chinese investors’ appetite for Class A US commercial property is once again evident as the country’s Anbang Insurance Group, owner of the Waldorf Astoria Hotel, has agreed to buy 21 floors of an office building on Fifth Avenue in Manhattan.
The building is situated at 717 Fifth Avenue on East 56th Street. Anbang has agreed to buy it from Blackstone Group, the US private equity firm at a selling price of between US$400-$500 million.
Anbang currently holds a portfolio of assets worth approximately 800 billion yuan (US$ 130 billion).
Other Chinese companies have also been drawn to the “safe haven” of Manhattan commercial real estate. They believe they can achieve stable returns in this market, which has performed well in the past.
Chinese investors tend to buy high quality real estate in North America and increase their holdings over time, making North America and Europe priority focus markets.
In 2014, a total of 442 deals closed in the New York City property market, setting a new record over the previous annual high of 346 transactions in 2007, according to real estate consulting firm Jones Lang LaSalle (JLL).
A recent report from Colliers International states that foreign capital is likely to continue to aggressively pursue opportunities in the North American market. Many local market and private equity funds are also actively looking for assets, fueling the demand for Manhattan property.
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