At 5 p.m. on a recent Friday, two dozen people sat at rapt attention in a nondescript, one-story office building next to the downtown Bellevue post office.
They had traveled from Vancouver, B.C., with Chinese real estate developer Hongpeng "Tom"; Yang to learn about investing in a large apartment/condo project that Yang's company is planning to build on the site, where a Papa John's Pizza now operates.
Speaking in Mandarin, Yang introduced the group to representatives of the Seattle companies - GGLO, Lease Crutcher Lewis, Daniels Real Estate - that are working with Yang's Create World America on the $147 million development. After each introduction, the crowd politely applauded.
Gatherings like this are becoming more common in the Puget Sound region. Not only are more Chinese nationals investing in commercial real estate, but some are taking high-profile roles in the development of high-rise projects. This is sending property values higher, redrawing the region's skyline and enriching local real estate players who have Asian connections.
Chinese investment in Puget Sound-area commercial real estate more than doubled from 2013 to 2014, to $62.8 million, according to Real Capital Analytics, which tracks real estate investing.
Asian capital has historically had an affinity toward the West Coast, with Los Angeles and San Francisco being the favorites. Investors from China now are homing in on the Pacific Northwest, particularly Seattle and Bellevue, said Jamie Boyd, managing director of real estate for Cascadia Capital, Seattle's biggest investment bank.
A mix of economic, political and cultural factors - including a blockbuster Chinese romantic-comedy flick called "Finding Mr. Right,"; which paints a flattering picture of Seattle - is driving the love affair between two places that already had strong ties.
Washington state, whose voters twice elected Gary Locke as the only Chinese American ever to govern a U.S. state, raised its profile even more when Locke became the first Chinese American to serve as the U.S. ambassador to Beijing.
China already is Washington state's top trading partner. And now Alibaba, the Chinese e-commerce giant and Amazon.com rival, is looking at setting up its U.S. headquarters in Seattle, according to Cascadia's Boyd, who said he has talked to multiple sources who think Alibaba will choose Seattle. (Alibaba has declined to comment.)
Capital from mainland China started pouring into the Puget Sound region commercial real estate market about five years ago, when Beijing allowed its citizens more latitude to invest overseas. Now, as the Chinese economy cools off a bit, many wealthy Chinese are jumping at the chance to do something they can't do at home - invest in property that they'll be able to pass down to their heirs.
It's "seemingly unstoppable,"; Boyd said, adding that Chinese investors have "an insatiable appetite"; for real estate in Seattle.
The region's brands, from Amazon and Microsoft to Nordstrom and Starbucks, are a big draw, but so are the region's schools and the Northwest's relatively pristine environment. The latter two themes were repeated over and over when experts and the investors themselves talked about why Seattle now.
It is not the amount of Asian money that's shaking up the commercial real estate market; rather, it's how the cash is behaving once it gets here. Asian developers aren't merely parking their funds in Seattle. Some are actively planning to build projects and are forming relationships with local companies.
The most ambitious is International Plaza. That's the working name of a downtown Bellevue project that Hong Kong-based Plus Investment USA is planning for a half-block property where the First Congregational Church now stands. The early plan calls for a pair of 43-story condo towers above a retail podium, and that's just for starters. Plus Investment CEO Kevin Corbett, who grew up in Spokane and learned Mandarin in college, says other uses for the property could include office and hotel towers.
Money is also coming from Taiwan. Publicly traded Chainqui Development, which builds commercial buildings and sells cement, has bought two downtown Seattle properties, including the Sheridan Apartments at 2011 Fifth Ave., where a mixed-use project up to 400 feet tall is possible.
Some investors want to enter Seattle not merely as a behind-the-scenes player. Instead, they're seeking a visible role to earn a good reputation so they can come back and develop more projects, Boyd said.
This has led to opportunities for Seattle-area developers such as Kevin Daniels. The head of Daniels Real Estate is working with Create World on the apartment/condo project by the Bellevue post office. Daniels said his company does not at this time have an equity position in the project but is a partner in the joint venture, providing development and other services.
"Seattle has a long history of working with mainland China dating back into the late 1800s,"; Daniels said. "I do see that relationship strengthening and continuing to have an impact on the Seattle real estate market - both commercial and residential - in the coming years.";
Then there's the speed at which Chinese capital acts. Brian Hatcher, executive vice president of Seattle-based real estate services company Kidder Mathews, said the Chinese "have changed the entire way people go after buildings.";
Most U.S. buyers don't close a deal until they know for sure what they can build on the property. But when Chinese investors find the property they want, Hatcher said, they act quickly.
"They look at a property and say, "Twenty years from now, this is going to be a good property no matter what. Lock it up today and our money is safe,' "; said Hatcher, whose West Coast company has a China Services Division.
What's occurring in the Puget Sound region is hardly new. News of a gold strike in Eastern Washington drew Chinese immigrants in the 1860s, and in the following decades Chinese were recruited to work on railroad crews, and at logging camps and salmon canneries.
In the 1990s came investors from Taiwan and Hong Kong. China became the world's factory, generating tremendous wealth that continues to swell. According to Boston Consulting Group, the number of Chinese millionaires skyrocketed 82 percent in one year, to nearly 2.38 million in 2013. During the same time, the number of U.S. millionaires grew by only 18 percent to 7.1 million.
Canadian politics also is driving Chinese investors to look at Seattle. Canada has long been a popular place for Chinese investors, but in 2014, Ottawa pulled the plug on its investor immigration program, canceling a backlog of tens of thousands of mostly Chinese applicants.
This suddenly had many Chinese looking south from British Columbia to Seattle, where the federal government's EB-5 investor program has helped fund myriad commercial real estate projects, from Facebook's new $136 million office overlooking Lake Union to Washington Place, a 19-story hotel/apartment building going up in the Southcenter area of Tukwila.
By investing in jobs-generating projects, foreign nationals can get green cards under the program.
This is why the group gathered at Create World's Bellevue office on a recent Friday. An EB-5 lawyer was present to talk to the guests. Some were from the mainland, some form Hong Kong and others were Chinese-Canadians looking at investment opportunities that friends back in China could invest in as a means of gaining entry to the United States.
In introducing the prospective investors to his project team, Create World Executive Director Yang emphasized the credentials of his U.S. partners. He called Daniels the "No. 1 developer.";
In an interview, Yang talked about how he's coming here not only to make money but to forge relationships.
"We come here to find partners, the best professional partners,"; he said during the interview, which a Create World employee translated.
He added that while the Bellevue development is his first in the U.S., it won't be his last.
Here are some recent major Puget Sound area acquisitions by Asian real estate investors and developers:
Bellevue: $75. 9 million
Site: 752 108th Ave. N.E..
Plan: 43-story condos
Buyer: Plus Investment USA, affiliate of Hong Kong-based Plus Investment
Bellevue: $46.7 million
Site: West of Transit Center, 527 108th Ave. N.E.
Buyer: Niu Enterprises, China
Seattle: $20.7 million
Site: 2011 Fifth Ave.
Plan: Mixed-use up to 400-feet tall
Buyer: Chainqui Development, Taiwan
Seattle: $20 million
Site: 2302-2316 Fourth Ave.
Plan: Condos, 1 up to 25 stories, the other 8 stories
Buyer: North American affiliate of TeamRise of China
Bellevue: $17.6 million
Site: 10230 N.E. 10th
Plan: Mid-rise with 162 apartments and high-rise with 110 condos
Buyer: Affiliate of Hong Kong-based Create World International
Seattle: $5.2 million
Site: 2401 Third Ave.
Plan: Likely residential tower up to 125-feet
Buyer: Chainqui Development, Taiwan
Seattle: $5 million
Site: 1121 Stewart St.
Plan: Hotel/condo, according to GIS International Group
Buyer: RBF Property Group, China
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