AFS-RE 2016 Real Estate Investment Trend Seminar
The Scholz Team was invited to attend this recent Real Estate Seminar to discuss the state of the market and how it pertains to Asian investment in New York City and the US as a whole. The discussions including REITS, EB-5 Investor Program, Commercial Investment from Abroad as well as the health of the market in general.
There were around 90 guests attending the seminar, including professionals working in various walks of the real estate industry and a small portion of students. Attendees were from AIG, Blackstone, Columbia University, Compass, Eaton & Van Winkle LLP, Financial Times, Fosun, Gemdale, Jewel Capital, JLL, Kuafu, PwC, Real Capital Analytics etc. The seminar was a great success and both speakers and audiences gave very positive feedback.
-Scott Latham, Vice Chairman at JLL Capital Market:
It was interesting to find out that downtown Manhattan, after years of struggle, has shown a potential of revitalization. It has become a transportation hub again after several significant constructions including the WTC station. With more convenience and amenities, residents are moving to downtown.
-Jim Costello, Senior Vice President at Real Capital Analytics:
The election will impact real estate market in terms of tax policies (1031 Exchange) and promoting interests.
-Henry Mo, Managing Director and the Chief Economist at AIG:
There is definitely some uncertainty on the market, especially when we consider about the Federal Reserve’s decisions upon the interest rates. But the election result effect would be moderate.
Regarding the event that RMB joining the SDR, Henry believed that it’s more symbolic than real. He joked that if it had such large impact of RMB globalization, there won’t be so many restrictions to stop RMB outflowing and exchanging to US dollars.
-Samuel Li, Founder & CEO at Jewel Capital:
The capital flooding from China has already been a trend and the impact of the election would not be structural. There are two reasons for Chinese investors to come to the United States. The first one is to preserve their wealth by investing in strong global assets. The second reason is to penetrate into this U.S. market and enjoy the appreciation.
-David Kruth, the adjunct professor at Columbia GSAPP & Managing Partner at Brooklyn//Queens Properties:
“Chinese developers own about 68 development sites across the US, with vast majority in NYC, LA and SF.”
-Leonard Steinberg, President at Compass:
“Chinese government’s ultimate purpose is to increase tax value, which, the US style REITs cannot fulfill. Besides if China wanted to learn the US style REITs, Chinese government has to make a lot of information transparent.”
-Bruce Feffer, Partner at Eaton & Van Winkle LLP:
“The Chinese never rent.” He had some very wealthy Chinese investors with their luxury apartment sitting there from months to months and doing nothing. Even though the wealthy Chinese were only staying in the US occasionally, they still buy condos.
He also raised a very interesting point of view that the restriction of RMB outflowing is not a huge barrier for investment in the States. People had exaggerated that fact. It’s actually because there's not enough appealing deals in the market.