Sumitomo Agrees To Sell Atlanta Financial Center At Huge Loss

The years between 2013 and 2017 in the global commercial real estate market were, in large part, defined by the waves of capital pouring into the world’s gateway cities from China.

When Chinese real estate firms placed billions in huge bets on trophy office assets and luxury residential developments in London, New York, Los Angeles and San Francisco, it wasn’t just a big deal for real estate. It was a sign that China’s huge economy was beginning to mature, exporting wealth around the globe and diversifying beyond its own borders.

But many of the big purchase and development schemes undertaken by Chinese firms between 2013 and 2017 have hit the rocks recently. Lenders have foreclosed on loans and taken back some projects, while other Chinese firms have sold assets at a loss or seen big developments go billions of dollars over budget.

Some deals undertaken by Chinese companies in the U.S. and UK have turned out to be wildly successful, and the problems at the other properties aren’t unique to the Chinese — both domestic and foreign owners have faced financial turmoil as the market has become more volatile in the past couple of years.

But China stands out, because of the size of the bets its companies made, the scale of the losses involved, and because of the significance these losses have for how the world’s second-largest economy will engage with the world in future.

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In Case You Missed It...

AmTrust Realty President Jonathan Bennett said he believes in the power of being contrarian.

His mindset of bucking expectations was formed by The Catcher in the Rye — he used to keep a copy on his nightstand — and it carries over into his real estate investment strategy. Bennett said commercial real estate is too quick to blow short-term trends out of proportion and to invest as a herd.

Questioning or even betting against the prevailing opinion has led him to success. 

AmTrust owns 12M SF of mixed-use, office and multifamily properties primarily in New York City and Chicago.

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