Luxury Beverly Hills condominiums by starchitect Richard Meier are still going up on the former Robinsons-May store site. But the eight acre project will no longer be owned by Hong Kong real estate firm Joint Treasure. In a $420 million dollar mega deal, the Chinese private equity group “flipped” the property to the Wanda Group, China’s largest real estate developer.
Photo: LA Times
It’s a telling deal, as Asian investors continue to snatch up trophy assets across the country. Just last week a little known Chinese insurance company pledged to restore New York City’s famous Waldorf hotel to its former glory, after agreeing to a $2 billion dollar sale with Hilton.
Closer to home in downtown Los Angeles, Shanghai’s Greenland Group started construction on a $1 billion dollar condo, hotel and retail project named “Metropolis”. And Chinese property developer Oceanwide purchased a massive parking lot across from the Staples Center, with grand plans to build retail and residential space.
Another $1 billion dollar project funded by Korean Air is even further along. The Wilshire Grand hotel and office skyscraper is scheduled to open in 2017 and has a planned skylight the size of a football field. It will be the tallest building west of the Mississippi.
Photo: Wilshire Grand Center
Mostly from China and Singapore, these international investors are occupying an increasing segment in the Los Angeles real estate market. In the first half of the year, Asian investors spent $1.3 billion in Los Angeles alone. That’s almost double the $795 million they invested in all of 2013.
The prestigious Beverly Hills property was purchased by Joint Treasure International in 2010 when they beat out 20 other worldwide competitors with a $148 million bid. At the time, that price seemed high. In hindsight, it looks like a steal. Though the exact sale price was not disclosed, insiders leaked that the Wanda Group paid around $420 million to acquire rights to the mixed use site.
9900 Wilshire Blvd Condos by Richard Meier
Particularly in high end areas like Beverly Hills, demand for condos is recovering after being a particularly hard hit sector of the 2008 crash. The Wanda group intends to break ground next year with the already existing and much delayed Richard Meier design. Along with 235 new condos, there are plans for nearly 21,000 square feet of restaurants and shops.
The influx of international and specifically Asian investors to the L.A. real estate market shows no signs of slowing. Chinese developers like the Wanda Group, Oceanwide and Greenland are recognizable brands at home and are looking to establish their names stateside. More local development means more jobs, but increased competition for investors, especially for in demand trophy properties.