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a
Fostered by
a century
and a half of
interaction, China
and Northern
California’s Bay
Area have deep
economic and
cultural ties.
From the 1850s to 1900s, San Francisco’s Chinatown
was the port of entry for early Chinese immigrants
from the Guangdong Province of Southern China.
Fast forward to 2012, and 21.4% of the population in
San Francisco was of Chinese descent—the highest
percentage of any major U.S. city.
It’s not surprising that in 2016, familiarity, as well as
solid economic fundamentals, makes the Bay Area an
attractive place for Chinese individuals and companies
to invest their capital. Inbound Chinese real estate
investment has increased from 2014 to the present. A
Real Capital Analytics study shows that $471 billion
has been invested in the U.S. in the last four quarters,
and $91 billion of that in California. The built office
environment has been the largest growth area, but
development opportunities are garnering interest
because of the perceived higher return from the low
cap rates paid for the existing office product.
Chinese investor dollars are fueling the growth of
San Francisco, the Peninsula, Silicon Valley, and East
Bay, and are also precipitating the California housing
bubble—35% of all residential real estate in California
is acquired by overseas Chinese investors, $22 billion
in the year ending 2014.
ASSET SERVICES INSIGHTS | 19