2014-10-06

Boston is China's Town

China’s Town
“The writing’s on the wall,” Entwistle tells me, and he’s not the only one who sees it. “It is true that we are seeing Chinese capital looking very, very, very hard at Boston,” Darren Xia, the China director for the International Capital Group at Jones Lang LaSalle, tells me from his Beijing office. “There will be one or two projects in Boston this year, and they will be large-scale development projects.”

Meanwhile, 28-year-old Charles Wang—who, as a rookie real estate agent in 2012, tried advertising in Mandarin and went on to sell 15 luxury condos at Millennium Place to Chinese investors in just a year’s time—is one of the many local entrepreneurs who see it too. “A big elephant takes a while to get started,” Wang tells me. “And it takes a while to stop.”

...To China’s wealthiest investors, Boston looks like an underdeveloped growth market at bargain-basement prices. Clocking in at more than $400 per square foot, Beijing’s median housing prices are nearly twice as high as our metro area’s. Add Boston’s relatively low real estate prices to its world-class education system, thriving biotech sector, clean environment, and rich history, and the city looks like a sure thing.

...This infusion of Chinese capital is fueling an already hypercompetitive residential real estate market. Over the past three years, as Chinese demand has accelerated, Boston’s median home value has gone up 26 percent, more than twice the nationwide rate of 12 percent. Over the past year, one-fifth of Coldwell Banker’s buyers in Boston have been foreign, of which the Chinese make up the largest percentage, says Pat Villani, president of the brokerage’s New England group. “For many years, we have talked about Chinese buyers coming into the market, because they started in New York quite a few years ago and made an enormous change on the New York market,” Villani explains. “Our market’s really been impacted over the past two to three years. It’s growing every year, and it’s making a difference.”

...The day after CCTV aired its exposé of the Bank of China, I sat waiting for a local Chinese-born EB-5 lawyer as she dashed around her Lexington office. She was ignoring our appointment—in part because she had decided she wanted nothing to do with this article, and in part because prospective EB-5 investors were flooding her office with calls. When she did stop to give me the time of day, the lawyer, who declined to be identified by name because she did not want to damage her relationship with the Chinese government, explained that she’d seen an overnight spike in business. Rich Chinese were spooked by the possibility that the CCTV report meant the window for getting cash out of China was closing.

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