Developers who are redoing downtown Dallas’ landmark Statler Hotel have spent time in China courting investors.
“I’ve already made three trips to China,” said Frank Zaccanelli, a partner with Centurion American Development Group. “They are very interested in what’s going on in Dallas.”
Centurion American, which also has suburban home and commercial projects in the works in North Texas, isn’t the only local real estate firm with an appetite for Chinese investment.
Chinese money has funded recent downtown Dallas tower sales.
And capital from China is finding its way into everything from local apartments to single-family homes.
Last year Chinese investors pumped more than $3 billion into U.S. commercial real estate investment, according to data from the commercial property firm JLL.
And they bought more than $28 billion in American residential properties — more than twice what any other foreign buyer acquired, according to the National Association of Realtors.
Asian investors accounted for almost a third of Texas home sales to foreign buyers, behind only Latin Americans, who accounted for more than 40 percent, the Realtors said.
Chinese buyers are hot for Dallas-area apartments, too.
“We’ve closed $550 million in transactions in the last 90 days,” said Chris Colombe, managing director with the apartment broker ARA. “Probably a third of those deals had equity coming from China.”
Chinese investors are the top foreign buyers and funders of U.S. hotel acquisitions this year. And they are one of the top offshore players in the office market, according to data from the Urban Land Institute.
Traditionally, Asian buyers have liked West Coast markets, but with prices for property there skyrocketing and fewer chances to buy, Chinese and other foreign buyers are scouting Dallas for deals.
“There are fewer opportunities in the gateway markets they are familiar with,” said Walter Bialas, market research director with JLL. “There is a North Texas story that is real compelling today, and it’s put us on their radar.”
Indeed, most Chinese investors probably haven’t heard of Plano. But they know Toyota.
And downtown Dallas’ skyscrapers are bargain-basement-priced compared with towers in California or New York.
Bialas said the increase in Chinese property purchases in the U.S. is due to a growing need for capital preservation and the opportunity to participate in one of the best real estate markets this country has seen in generations.
“They want to make money,” he said. “And their property hold periods are longer than a lot of the quick flippers we see.”
Foreign investment in Dallas real estate comes in waves and different flavors.
When I started writing about the local property market in 1980, the big story was Canadian buyers and developers.
Soon the emphasis shifted to Japanese investors.
Germans and other Europeans were next to make headlines here.
But for the coming year or two, don’t be surprised if Chinese money winds up in North Texas property purchases.
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