The Chinese Are Coming, The Chinese Are Coming
Posted by Peter Vekselman Thursday, 26 July 2012 06:39 No Comments
I’ve written several times about how foreigners are taking full advantage of the deeply discounted real estate market here in the US. The Brazilians and other South Americans are buying up Florida, the Europeans and others are buying up the Northeast, and the Chinese are buying up the West Coast.
Now, the Chinese are negotiating to take it a step further with a $1.7 billion development project in San Francisco. And this is Chinese government money coming from the China Development Bank and Export-Import Bank of China. They are negotiating with one the largest US developers, Lennar Corporation, to fund up to 20,000 residences, a sports arena, and millions of square feet of office and retail space. The city has committed hundreds of millions in tax incentives to encourage this development on two abandoned naval bases.
The negotiations could still fall apart but have been active for about a year. One sticking point is China has required Chinese workers be part of developments it previously funded in third world projects in Africa, Asia, and South America. That’s not going to fly here in the US.
It’s not clear how it would be involved but the government owned China Railway Construction Corporation is said to be part of the negotiations. In all likeliness, they might be brought in as a consultant or they may be looking at purchasing local construction companies that would be part of the project.
It’s well known that the Chinese are looking for more opportunities in the US market. The redevelopment of these two naval yards is seen as an opportunity to get a foothold in the market and as an opportunity to learn what it takes to do large-scale business in this country. Another motivation for the Chinese is this is a green, environmentally friendly, project and the Chinese want to learn the latest green technology available.
China is actively investing all around the world. Even at $1.7 billion in San Francisco, the deal is small compared to the $20 billion it invested in Venezuela and the $25 billion invested in Russian oil production in recent years.
All the Best,
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