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EisnerAmper Blog

Building Success: An EisnerAmper Real Estate Blog

Asian Investing in New York City

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March 17, 2015

By Michael Benison, CPA, MST

EisnerAmper’s Angela Chen, Deborah Friedland, and Michael Benison attended the "Asian Investing in New York City" seminar hosted by Stroock & Stoock & Lavan LLP on March 3rd. Attendees heard key takeaways on current Asian investing trends in the NYC marketplace.  According to Daniel Rosen of the Rhodium Group, LLC, Chinese investors are a big influence on the U.S. markets, with roughly $15 billion invested nationwide each year in all sectors of the economy. Chinese investors are comfortable with U.S. real estate assets as they feel that they are relatively safe investments. They are looking at all kinds of property types including office buildings, condos, residential buildings, and luxury hotels. Last year, Chinese investors funneled more than $3 billion into the New York real estate market alone. Chinese investment companies like FoSun want to give value to their investors, and have a long-term vision in mind which is sensitive to the investee’s local community and culture. FoSun’s Erik Horvat stated that they brought in a local team in to analyze the property and community surrounding 28 Liberty before making the purchase.  This was their first big purchase, and their presence in the U.S. is expected to continue to increase over the next few years.  Another China-based company, Greenland Holding Group, is partnering with Forest City and investing in Brooklyn’s Atlantic Yards (now known as Pacific Park). F&T Group, another Chinese company, is considered the largest land owner in Flushing and, according to Richard Siu, their Chief Investment Officer, the company’s approach is to “build a city within a city.” There is a great influx of capital coming into Flushing.  Investments of the kind that FoSun and F&T participate in will help the local economy and revitalize the community.

Asian investment also makes a real impact in the employment sector. There are roughly 80,000 paychecks in the U.S. that originate from China-based companies. Japan-based companies pay out roughly 700,000. It will be interesting to see how much payroll will increase from China-based companies in the future.

London is New York City’s main competitor in attracting foreign investment, and tax compliance is much simpler in London. In the U.S., foreign investors have to be concerned with FIRPTA and FATCA.   The Committee on Foreign Investment in the United States (CFIUS) is an inter-agency committee run by the Department of the Treasury, which is tasked with reviewing all transactions which could result in control of a U.S. business by a foreign person in order to determine any effects on national security. It takes longer to finalize certain foreign transactions in the U.S. because of this special review process. According to William Shanghan from CBRE, London markets are about 4-6 months ahead of the U.S. markets (cap rates and rents started to increase in the U.S. 4-6 months after increases in London took place).

There are also some additional barriers to entry for Chinese investors.  Investors need to be aware of the local language and culture in which they are investing. The Chinese government has an outbound approval process of any investment larger than $1 billion. And it can be very difficult to find high quality assets. Is Flushing the best opportunity, for example? There may be higher yields in markets outside of New York. Chinese investments are also flowing outside of the boroughs and into Long Island, Greenwich, and Jersey City as they continue to search for opportunities in our marketplace. 

EisnerAmper’s Lisa Knee Interviews NYC Department of Urban Planning’s Purnima Kapur

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March 13, 2015

Pair Kick Off Real Estate Weekly’s Annual Women’s Forum

Lisa Knee, a partner here at EisnerAmper, recently had the opportunity to open Real Estate Weekly’s annual Women’s Forum by interviewing Purnima Kampur, executive director of the New York City Department of Urban Planning.  In this recently published far-ranging discussion, Ms. Kampur touches on a variety of topics from her beginnings as an architecture student to how she came to develop a career as a planner and some of her more memorable early projects, as well as the challenges of New York City and its diversity of neighborhoods and people. You’ll get Ms. Kampur’s insights into Mayor De Blasio’s very ambitious housing plan -- building 160,000 market-rate apartments as well as constructing and preserving 200,000 housing units over the next decade, with a pledge of more than $200 million to help foster the development.  From Greenpoint and Williamsburg to East New York, Jerome Avenue, the Bay Street Corridor to Long Island City and the Sunnyside Yards, plans are developing.

Ms. Kampur also discusses very key concepts — the differences between sustainability and resiliency, and what those terms mean for New York.

To read the full interview, originally published in Real Estate Weekly, please click here.

Weissenberg Featured on AM 970

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March 10, 2015

By Kristen Lewis

Partner Ken Weissenberg appeared on last Saturday’s Eye on Real Estate program on radio station AM 970. Eye on Real Estate brings listeners information on housing and real estate issues, including the latest mortgage rates, market trends, sales figures, new developments, commercial real estate news and the luxury market. Ken was involved in one of their in-depth real estate expert interviews, bringing his tax and estate planning know-how to the table. Ken took calls from listeners with questions regarding potential tax deductions, inheritance issues, gifting estate, and selling properties.  He also addressed mortgage interest, vacation properties, co-ops, and a variety of other concerns. The focus of the conversation included information on how listeners can take certain deductions on real estate and other expenses this tax season, and how they can plan ahead for next year’s tax filings in order to maximize their results. As with every season, questions surrounding when or if to make a gift of property to family members and the potential impact on taxes came up several times. Listen to Ken’s take on these issues during the broadcast and learn what factors you need to consider as you plan for filing. To hear the podcast, you can click here for Part One and here for Part Two.

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