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February 11, 2014

Bay area real estate investing gets boost

China Daily

Yu Wei

A new partnership is opening up opportunities for Chinese investors interested in San Francisco Bay Area real estate.

The collaboration is between Kidder Mathews, a San Francisco-based commercial real estate firm, and China's Tsinghua Real Estate CEO Chamber of Commerce, a non-governmental organization comprised of more than 3,000 real estate company members.

"This will act as a bridge for Chinese business investment that wants to come to the Bay Area," said Skip Whitney, executive vice-president of Kidder Mathews.

In 2012, Kidder Mathews opened its China Services Group (CSG), the only China-focused cross-Pacific real estate group in the US that aims to help Chinese investors based on the increasing flow - both business-wise and personal-wise - between China and the US.

"CSG is uniquely situated to help Chinese investors since we have Chinese Nationals in our company, which allows us to communicate in Mandarin and allows the investors to feel comfortable in understanding the local customs and challenges in doing business in the US," Whitney said.

"We also go beyond the initial investment and acquisition to work with other professional service providers, such as legal, tax and financing to insure that our client has covered all of the bases for compliance at the highest level for their investment to insure it will be successful," he added. Whitney said he and his team will be able to provide a menu of opportunities for the Tsinghua Real Estate CEO Chamber of Commerce investors, including acquisitions of core commercial office buildings in the West Coast gateway cities, office and tech buildings in Silicon Valley, life science building assets, residential joint ventures and development opportunities and retail projects.

"Along with taking advantage of China's incredible economic growth, our members have gained vast experience in real estate development and other related fields," said Henry Xu, deputy secretary-general of Tsinghua. "Our members have also acquired experience and abundant capital."

Chinese investors have been buying commercial and residential real estate throughout the US, but particularly in the San Francisco Bay Area.

Last year, Chinese developer Zarsion Holdings Group inked a deal to build a $1.5 billion waterfront development in Oakland, California, during Governor Brown's trade mission to China in April. In February, China Vanke Co announced a $620 million luxury condominium project in San Francisco with New York-based Tishman Speyer Properties.

According to the National Association of Realtors, Chinese buyers increased their share of total US home purchases from 5 percent to 11 percent from 2007 to 2012, ranking China second among foreign buyers behind only Canadians, and potentially contributing as much as $1 billion in 2012 capital inflow to the US.

With more than 35 years of experience in real estate and longstanding relationships in the domestic real estate community, Whitney said the opportunity has never been greater for the US and China to work together in cross-Pacific investment into all forms of real estate.

"The China real estate market is maturing and the opportunity for Chinese investors to see the same return as they have in the past is slowing down. In contrast, the US property market is stable and still has long term growth available," Whitney explained.

"In addition, the US real estate community is looking for new sources of capital and equity beyond the traditional core US investment community and is very keen to build relationships with Chinese real estate investors on many levels," he added.

San Francisco is the top-ranked real estate market in the US for the second year in a row, according to Emerging Trends in Real Estate 2014, a report published by PriceWaterhouseCoopers.

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