On March 10th, the University of Washington Real Estate Club invited industry experts to speak on Chinese Investment in the Puget Sound Region. Among the panelists was Dean Jones, Owner & CEO ofRealogics Sotheby’s International Realty (RSIR), who was joined by Kelly Chiou, Vice President/Deputy Head of Greater Seattle Business Center for ICBC USA; Reid Rader, Vice President of Eastdil Secured; and Allen Zeng, CEO of AUG.
Each speaker was tasked with explaining their role in facilitating Chinese investment and offering interesting data or information to set the context for the panel discussion. Dean Jones offered his expert market observations, described a few notable transactions and marketing endeavors, and outlined why the Puget Sound, and Seattle in particular, has emerged as a global gateway city.
“From a residential perspective, we are at the intersection of the Chinese Miracle and the American Dream,” said Jones. “We are geographically well positioned but more importantly, economically poised for further growth with inbound investment and immigration.”
Jones refers to the tremendous wealth that has been created in China, the world’s fastest growing economy in the past decade, as well as the popular trend to emigrate to the US for prosperity, an investment safe harbor and lifestyle.
Jones brought copies of Seattle Luxury Living, an all-Mandarin magazine released by RSIR and Tiger Oak Publication, that responds to the steady rise in affluent Chinese nationals arriving to the Seattle/Bellevue metro area. He also showed East Meets West, a feature documentary produced by RSIR that outlines China’s influence on the real estate market in the Seattle area:
A re-cap published by the UW Real Estate Club describes Jones’ outline of the desirability of the area, as he explained that more than a popular culture icon in China, “the Puget Sound presents the opportunity to invest in an American city with beautiful natural surroundings, excellent educational and healthcare institutions, a strong and well-diversified economy, and only a short flight to mainland China.”
Among the more pivotal observations was that Asia now appears to be the top international investor in the US. A graphic provided by Eastdil Secured, which was based upon a trailing 12-month history from Real Capital Analytics suggests that Asia has trumped Canada as the greatest source of direct investment in US. The graphic demonstrates the tremendous downturn in the US economy, in part because of a reduction in foreign investment falling from a peak in 2007 and bottoming in 2009 at the depth of the Great Recession. However, the foreign investment in the US rebounded in 2010 led by Canadian and Asia sources to set new peaks in 2015 with Asia being the largest and fastest-growing offshore investor.
“Not only has foreign direct investment reached new heights across the US but an increasing percentage of that is focusing on emerging markets, such as the Seattle metro area,” adds Jones. “This is having a compounding effect on our region and I believe the trend is here to stay as Asian investors, particularly those from China are finding preference in our market fundamentals.”
The Puget Sound Business Journal also picked up on foreign investment recently, in a feature which described that “International investment more than doubled in 2015 and it’s not done yet.” As Marc Stiles writes, “international investors purchased $2.8 billion worth of assets in the region last year, according to Real Capital Analytics, which tracks real estate investing. That tally was a staggering 214 percent higher than the year before.” Most of these investments were made in King County, with the region’s most significant deal being the Columbia Center in Seattle, which Gaw Capital Partners purchased for $711 million.
Stiles further says that investment is expected to continue thanks to the “Industrial and Commercial Bank of China. The state-run bank, which is the world’s largest by assets, recently opened a business center in Seattle, its first in the Northwest.”
“The feedback I received last night was very positive with ‘minds blown’ by the scale of investment in store for Seattle,” said Alastair Townsend, a Master of Real Estate Candidate at UW who helped organize the event. “I think we set the bar higher in terms of professionalism and quality of UW Real Estate events too, and I could see our Chinese classmates were very engaged and appreciated meeting you. Thank you for making it possible.”