Chinese Investment Restrictions Could Delay 34-Story Alexandria Residential Tower
China's tightening restrictions on offshore investment have reduced the overall influx of money into U.S. real estate, and now they could have a tangible impact on one of the D.C.-area's tallest planned buildings.
JM Zell had hoped to break ground by the end of the summer on a 34-story, 375-foot-tall residential tower with 368 luxury apartments at its Carlyle Plaza Two development in Alexandria, but CEO Jeff Zell said uncertainty over its capital source could push that timeline back.
The project has been planned to be largely funded by Chinese investment, facilitated by partner Hines, but Zell said the Chinese investor is having trouble getting its money out of the country. He said China's capital restrictions are forcing him to deal with frustrating political circumstances the likes of which he hasn't experienced before.
"We're ready to go," Zell said. "It's kind of like I'm caught up in the political world of reality today, and this isn't a game show ... I'm not a happy guy."
Zell said he has begun to explore alternative capital sources for the project, but since the Chinese investor already funded some of the design phase, he is obligated to wait for the investor to try to resolve the situation. If the money were to be released immediately, Zell said the project could break ground by the end of September. If the Chinese investment falls through and he has to fund the project from other sources, he said it could delay the development by at least 60 days.
The tower would be the first phase of a four-building development about a half-mile east of the Eisenhower Avenue Metro station. The project's later phases are under consideration for the new campuses Amazon and Apple are planning, and Zell is optimistic about its chances. The development sits on the fast-growing Eisenhower Avenue corridor, home to the U.S. Patent and Trademark Office and the new National Science Foundation headquarters.
Zell will discuss this development Aug. 9 at Bisnow's Future of Alexandria event at the George Washington Masonic National Memorial.