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Chinese investment in U.S. real estate expected to grow

On Behalf of | Aug 25, 2016 | Uncategorized

Some Missouri residents may recall reports from the 1980s about wealthy Japanese buyers scooping up iconic American companies and landmarks like Columbia Pictures and Rockefeller Center. Fears that the Japanese spending spree marked the waning of American influence and the dawn of a new economic age proved to be unfounded, but now similar stories are being written about a similar surge in Chinese investment.

Investors from China also seem to be drawn to well-known luxury brands. Chinese acquisitions in 2016 include General Electric’s appliance division, the Chicago Stock Exchange and Motorola, and most financial observers predict that spending by Chinese investors this year will eclipse the $15 billion they pumped into the U.S. economy in 2015. While these investors tend to seek out leading companies in the health care and technology sectors, it is the residential and commercial real estate markets where they have been most active.

The Chinese are already the most prominent international purchasers of American residential and commercial property, and most analysts expect them to spend an additional $200 billion or more on American real estate by 2020. High-profile commercial acquisitions tend to receive most of the attention, but the majority of the money spent by Chinese real estate investors has been used to buy residential properties. Chinese are acquiring homes as either investments or to serve as residences, and they tend to buy properties located in affluent neighborhoods in thriving metropolitan areas like New York, Miami and Los Angeles.

Dealing with international buyers adds an additional layer of complexity to real estate transactions, and misunderstandings caused by cultural differences can sometimes result in unnecessary and expensive delays. Attorneys may be able to help property buyers and sellers to avoid such problems by adjusting the language of contracts and other legal documents to make them more acceptable to those from different backgrounds while still protecting their clients’ interests.