Chinese investors pounce on distressed US real estate | 31 October 2013
Wealthy Chinese investors are taking advantage of huge discounts on distressed buildings in the US and seeing plenty of potential for growth.
Ibtimes.com says the rising price of real estate in China is forcing investors to look elsewhere in search of property which can be sold on for profit.
A huge selection of residential buildings in places like Detroit, California and New York have suffered from years of vacancy after becoming overleveraged during America’s boom years.
Experts reporting to wsj.com say investors are looking to keep hold of their real estate until values of property start to rise again.
One of the most recent investments has been made by Chinese firm Dongdu International, who raised $13.6 million (£8.5 million) to purchase two commercial buildings in Detroit.
The company plans on converting one into an apartment complex and keeping its other investment as an office block.
Dongdu International also owns the Cassa Hotel in New York, which came up for sale after the previous owners sought bankruptcy protection.
Even after the sizeable discounts, distressed real estate is still trading hands for huge sums of money. It’s thought four of the 15 largest US property purchases over the last two years resolved a troubled situation faced by the previous owners.
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.
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