What Chinese Development Means for American Commercial Real Estate

February 28th, 2013 by Tatyana Levin

China is prospering.  There is no doubt about that.  They have ten times more millionaires than America does.  Sure, the country is bigger, but for the past 100 years America has been the most powerful and prosperous county in the world, so knowing that a country like China can or already has overtaken our power can be disconcerting.

What Chinese Development Means for American Commercial Real Estate

What Chinese Development Means for American Commercial Real Estate

What can be even more alarming is that Chinese developers are coming to the United States with plans for massive building products.

 

But what could that mean for our commercial real estate market?

 

According to the Wall Street Journal, Chinese developers are building for Chinese buyers.  This prediction has mixed implications.

 

The article states that Chinese developers are interested in developing in areas with large Chinese populations.  Considering what a huge and diverse melting pot that Los Angeles is, chances are developers won’t miss an opportunity to consider a site in LA.

 

Chinese buyers entering the US market, provided that they only buy Chinese developments, US investors won’t be affected by this influx of foreign development.

 

In fact, this can have a positive impact on the US economy.  Commercial or large scale residential developments mean more jobs for locals.  Additionally, any new development adds value to a neighborhood which is good for the community, especially if the neighborhood was previously floundering.

 

However, there is no way to guarantee that Chinese investors will only buy Chinese developments.  This can potentially mean that there will be fewer commercial real estate properties for US investors to buy.

 

Ultimately there’s no way to accurately predicting whether or not Chinese developers will take a deeper interest in America, and if so, what impact it will have on American investors and the economy as a whole.  All we can do is wait and see.

 

Tatyana Levin

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