With Chinese students, tourists, and investors flocking to New York, the city’s iconic Fifth Avenue has become a magnet for Chinese real estate buyers intent on snapping up crown jewels. Following the high-profile purchase of Park Avenue’s landmark Waldorf Astoria for nearly $2 billion by the little-known Anbang Insurance Group last year, Anbang was in the news again this week after purchasing an office building at 717 Fifth Ave, prime real estate close to icons like the Plaza Hotel, Bergdorf Goodman, and dozens of luxury boutiques and flagships.
According to China Daily, Anbang purchased 22 out of 26 floors in the nearly 500,000 square-foot office tower on East 56th Street. The office sits atop retail space owned and operated by Dolce & Gabbana and Armani. Although the purchase price was not disclosed, Bloomberg estimates it cost Anbang somewhere in the range of $400-500 million.
But Anbang isn’t the only Chinese investor lured to Fifth Avenue. Chinese Jeweler Lao Feng Xiang (老凤祥) recently opened the doors of its first flagship in the United States between 47th and 48th street. Sitting next door to London brand Karen Millen, Lao Feng Xiang’s decidedly gold boutique (helpfully named “LFX Jewelry” for those with difficulty pronouncing the name), stocked with 24K gold and jade jewelry, is presumably aimed square at the Chinese tourist-shopper rather than the American audience.
As Winick Realty’s Joseph Isa told the Real Deal, “Lao Feng Xiang Jewelry knew the value of having a Fifth Avenue presence, not to mention one in such close proximity to the Diamond District…This lease catapults them to immediate brand awareness.”
These deals join other big-ticket Chinese acquisitions like a new office tower purchased by the Bank of China for $600 million on Bryant Park on Sixth Avenue. According to the Wall Street Journal, “Chinese investors sat on the sidelines for years, eyeing deals but rarely pulling the trigger. Recently, though, they have become more aggressive, as the government has encouraged its companies to spread money around the globe and the real-estate market in China has shown signs of weakening.” This interest in New York real estate has also jumped across the East River to Brooklyn, where Greenland Holdings Group recently bought 70 percent of a 6,000-unit apartment block near the Barclays Center, and the Xin Development Group is currently building its first-ever solo project in the United States, the 216-unit Oosten apartment complex (which has been marketed heavily to Chinese buyers).
According to data firm Real Capital Analytics, Chinese investors have spent more than $5 billion on property in New York since the beginning of 2013, compared to less than $300 million in 2012. By the looks of it, this is just the tip of the iceberg as an ever-increasing number of Chinese developers and individual buyers look to invest in property overseas to diversify their business or stash cash outside of China.