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

Tuesday, 10 April 2018

Chinese Investors Remain Committed to U.S. Real Estate

Chinese investments in U.S. real estate declined 55 percent last year to $7.3 billion, largely because of the Chinese government's restrictions on overseas acquisitions. That's according to Cushman & Wakefield, which expects Chinese investment volume to remain roughly flat this year. Expect fewer massive deals and more transactions in major secondary markets.

Commercial Real Estate Direct Staff Report

Chinese investments in U.S. real estate declined 55 percent last year to $7.3 billion, largely because of the Chinese government's restrictions on overseas acquisitions, according to Cushman & Wakefield.

Still, Cushman predicts that Chinese investment volume in the U.S. will remain about the same this year. But it expects fewer trophy assets than in 2015 and 2016 to be their targets. Chinese companies invested $13.4 billion in U.S. real estate in 2015 and $16.4 billion the following year, their peak years in the U.S. In 2014, they made $4.4 billion of real estate investments.

Instead of high-profile properties, Chinese companies are more focused on the industrial sector, suburban office buildings and smaller deals in general that they believe would receive less scrutiny from Chinese authorities.

The Chinese government issued guidelines last August that restricted investments in overseas real estate. In December, the country's National Development and Reform Commission declared that real estate investments valued at more than $300 million would need approval from the government.  

Even before those rulings, informal restrictions had been in place since late 2016 because China's foreign capital reserves had declined. It also wanted to stabilize the Renminbi, its currency.

Chinese regulations are difficult to predict, explained David Bitner, head of capital markets research for the Americas at Cushman. He added, "they can evolve over time."

Chinese authorities have targeted insurance companies, investment companies and sovereign wealth funds that accounted for about 75 percent of the country's deal volume in the U.S. in 2015 and 2016. Anbang Insurance Group and HNA Group, two of China's most active investors in those years, are among the companies that have put some of their U.S. holdings on the sales block in response to government scrutiny.

The Chinese government last year asked Anbang to sell its overseas...





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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

 

 

 

REITCafe

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