Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Thursday, 16 November 2017

Proposed Rule May Decrease Chinese Investments in U.S. Properties

China's economic planning agency has issued a draft rule that could lead to fewer Chinese companies investing in United States commercial properties. That would be on top of previous restrictions the Chinese government had placed on overseas property deals. Last year, the Chinese invested a record $19.2 billion in U.S. property, the most among foreign investors.

Commercial Real Estate Direct Staff Report

China's economic planning agency has issued a draft rule that could lead to fewer Chinese companies investing in United States commercial properties. The rule would be on top of previous restrictions the Chinese government had placed on overseas commercial real estate investments.

The latest proposal would call for Chinese investors to obtain approval from the National Development and Reform Commission for transactions in certain countries or industries it refers to as "sensitive." They will also have to notify the commission of any transaction of $300 million or more in "non-sensitive" countries or industries. The commission is soliciting feedback until Dec. 3 before finalizing the rule.

If the rule is finalized, "This will diminish the number of high-profile transactions that we would expect Chinese investors to purchase, at least in the short term as long as these capital controls are in place," explained Spencer Levy, head of Americas research for CBRE.

It's unclear whether the $300 million refers to the size of a proposed equity investment or the value of an entire transaction. It's also uncertain if U.S. commercial real estate would be considered a "sensitive" area. But previous guidelines had implicitly labeled foreign real estate investments as subject to prior approval.

Levy said, "The large, high-profile transactions where we had seen Chinese investors as bidders for many years, I think we're going to see a slowdown in that."

Chinese companies have invested $88.4 billion in foreign properties during the past seven years, according to Real Capital Analytics. They own 1,570 properties...





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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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