Pillsbury Winthrop Shaw Pittman

Ten major differences between real-estate investing in China and real-estate investing in the US

By Alan J Pomerantz and Thomas M Shoesmith

Commercial real estate is an approximately $26tn (RMB 162tn) global industry. The US has more than 25 per cent of the global commercial real estate at almost $7tn. (RMB 43.7tn). It has been estimated that in 2014 the US will experience approximately $6bn–14bn (RMB 37.4bn–RMB 87.4bn) of Chinese investment in US real estate, which is considerably more than the $996m (RMB 6.2tn) invested for all of 2011 and 2012 combined.

Entities interested in investing in US real estate are faced with a significant and complex array of state, local and federal regulations that can be challenging even to the most sophisticated and experienced investor. Real estate may be the most highly regulated and taxed asset class in the US and is considerably more regulated and taxed than in China. And investors from China have an additional set of tax and regulatory complexities not faced by US investors.

There is also a significant difference in the way deals are done in the US and in China. Transactions fail more because of a difference in culture and expectations, than because of a difference in language…

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