Last year, the Chinese publishing company Wanxin Media purchased 7-15 West 44^th Street in Manhattan for $68 million, with plans to develop a 90,375 square-foot mixed-use building featuring a luxury hotel and Chinese cultural center.^[1] The property has only increased in value over the past few years, making it a stable investment for the Chinese publishing company. 7 West 44^th St. Realty LLC acquired 15 West 44^th Street in 2013 for $29 million, and Jawani Properties LLC purchased 7 West 44^th Street for $9.75 million.

YIMBY published last May that the city already approved building permits “for a 19-story, 96-key hotel redevelopment, designed by William Green Architects,”^[2] but now development plans have changed. Wanxin Media filed plans with the Department of Buildings on May 29, 2018 to convert the 12-story office building into a 28-story development with 155 luxury hotel rooms, restaurant, tea room, and ballroom.[3] The hotel will be neighboring other hotels such as Sofitel and Algonquin.

This is not the first time the publishing company invested in real estate. In 2017 Wanxin Media partnered with another Chinese company and invested $184 million in private school assets to expand their portfolio.^[4] The Real Deal explains that “[i]t’s not unusual for large Chinese firms whose principal business has nothing to do with real estate to move into development.”[5] In New York particularly, overseas investors have contributed large amounts to the growing real estate market.

However, due to recent Chinese regulations, it has been more difficult for Chinese companies and individuals to invest large sums overseas. The regulations were implemented in 2016 and 2017 in an effort to strengthen China’s currency and encourage and stimulate domestic investment. Regulators have capped the amount Chinese nationals can invest internationally, which not only obstructs investors’ freedom, but also negatively impacts New York’s real estate market. Ultimately, these new regulations have hindered cash flow for many projects, leaving Chinese investors unable to close deals or even fulfill the EB-5 Visa requirements.[6]

[1] St. Clair, B. (May 24, 2017) “Chinese publisher pays $68M for Midtown dev site.” The Real Deal. Available at: https://therealdeal.com/2017/05/24/wanxin-media-buys-midtown-dev-site-for-68m/. Accessed on May 30, 2018.

[2] Wilson, R. (May 25, 2017) “Mixed-Use Project With Boutique Hotel and Cultural Center Planned at 15 West 44th Street, Midtown.” YIMBY. Available at: https://www.yimbynews.com/2017/05/mixed-use-project-with-boutique-hotel-and-cultural-center-planned-at-15-west-44th-street-midtown.html. Accessed on May 30, 2018.

[3] Parker, W. (May 30, 2018) “Chinese publisher to add 16 floors in Midtown hotel conversion.” The Real Deal. Available at: https://therealdeal.com/2018/05/30/chinese-publisher-to-add-16-floors-in-midtown-hotel-conversion/. Accessed on May 30, 2018.

[4] Yicai Global. (May 4, 2017) “Wanxin Media Decants USD184 Million Into 65% Stake in Private School.” Available at: https://www.yicaiglobal.com/news/wanxin-media-decants-usd184-million-65-stake-private-school. Accessed on May 30, 2018.

[5] Op. Cit. n2.

[6] See “A Downturn for Chinese Overseas Real Estate Investments.” Guzov, LLC. Available at: http://guzovllc.com/downturn-chinese-overseas-real-estate-investments/.