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Chinese investors have poured big bucks into the country, and while their appetite for US assets is big, there's one asset class they won't touch: rent controlled and stabilized units.
A lack of liquidity makes it a tricky proposition, Real Capital Analytics SVP Jim Costello says. "You don’t have a lot of other investors who have been doing deals in the area that you know you can sell to later."
Foreign investors are also unfamiliar with rent stabilization laws, choosing instead to focus on market-rate properties, CBRE vice chairman Darcy Stacom tells Real Estate Weekly.
Instead, Chinese investors and developers are building high-end condos for a capital return that'll come in just a few years, a common strategy back in China. "It’s always been a development game for them," Jim says. "So they’re just repeating their business model here." [REW]
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