High-End Real Estate and the New Chinese Buyers
By Muyao Shen
In Bill Seto’s office at Queens Crossing, a multilevel commercial building right in the heart of downtown Flushing, the first thing you notice is the rushing sound coming from the tabletop water fountain.
In Feng Shui ideology, water represents good fortune, and running water is supposed to bring this good fortune to the property owner.
“I’m not 100 percent into Feng Shui, but I believe about three-quarters, because that’s [relevant to] my business,” said Seto, president of Flushing-based Fultonex Realty LLC. “If I don’t believe it, how am I gonna sell to my buyers?”
Seto said many, if not most, of his ethnically Chinese clients come in with a Feng Shui master before they close deals.
“A Feng Shui master can actually talk the buyer out of buying that house,” he said, “You got a tree in front of your house? No good. Is it high on the street? Good. If it’s low? No good.”
Feng Shui, the Daoist philosophical system rooted in the Chinese culture, is just one element of the real-estate boom in Flushing. In this neighborhood that’s known for inexpensive Chinese eateries and services, local and foreign developers hope to bring massive developments featuring condominium-retail complexes, luxury amenities, and upscale retail brands from Asia. The new properties are designed to cater to the recent Chinese immigrants who come with both money and knowledge about the market.
Though Flushing is a magnet for a new immigrant from China thanks to its large Chinese population, that is not enough for many upper-middle- or a middle-class Chinese. Fangmeng Tian, a professor specializing in migration at Beijing Normal University, said the latest immigrants constitute a second wave, following the “super rich” Chinese who started to migrate to the U.S. in the early 2000s.
“The new waves are different. They look for quality,” said Max Wang, the president of Silverstone Group USA, a company that helps foreigners manage their properties in New York City. “Real estate developers are changing to chase that demand.”
The demand was clear when Onex Real Estate Partners, a Canadian developer, hit sales records for its mixed-use project, Sky View Parc in Flushing seven years ago.
The development, which is located next to the polluted Flushing Creek and train tracks, was delayed by the 2008 recession. And there were concerns when sales began in 2011. However, the project surprised the market by selling all of its total 448 apartments by 2013.
Zhi Xiaorong, originally from Wenzhou, China, bought a one-bedroom apartment at Sky View Parc five years ago. She said after living in Flushing for more than 50 years, she was glad it finally had a development that matched the style of the apartments in China.
“It’s very different from the other apartments in Flushing,” Zhi said in Chinese. “The concierge service and the staff in the lobby are all very convenient.”
“Sky View was so successful, and it changed the real estate in Flushing,” said Wang, who also bought a unit there in 2013 for his family after he moved from Beijing in 2009 to attend graduate school at Columbia University.
According to the Real Deal, more than 2,600 condominium apartments went on sale in Flushing’s market between 2010 and 2016, with up to 2,800 more expected to be added by 2021.
Most of the condos will be built in mixed-use projects similar to Sky View Parc, with residences built atop retail shops. That structure may seem odd to Americans, yet it’s common in China. Wang said it reminds him of condos in Beijing where residential buildings are part of a self-contained community with retail, parks and other services.
Among these projects, Tangram, a 1.2-million-square-foot development co-developed by F&T Group and Chinese developer Shanghai Construction Group America (SCGA), will offer a new high-end commercial and residential center along with a hotel and parking garage, according to SCGA’s marketing team.
The name of it, Tangram, refers to a traditional puzzle from China. The project was designed by Jean-Gabriel Neukomm, an architect with several previous projects in Asia, said Helen Lee, executive vice president at F&T Group.
By working with architects familiar with Asian cultures, Lee said elements like Feng Shui were incorporated through during the designing stage.
Selling at prices as high as over $1 million for a three-bedroom apartment, Tangram will also be equipped with upscale furnishings and appliances to compete against developments in Manhattan.
Carrie Law, CEO of Juwai.com, an Australia-based real estate website that helps Chinese buy properties overseas, said she believed these new projects in Flushing will be “very appealing to Chinese buyers.”
They “can’t help but do the math and compare the price in Queens to the price back home, say in Beijing or Shanghai,” Law said. “It looks cheap to them.”
Data from NUMBEO, a database of global living conditions, show that the average price per square foot for an apartment in Queens is $563 while in Beijing it’s up to $1,556.
“And the pictures look good, “Law added, “so they can show it off to their friends” in China.
Jack Lee, 28, who moved from Xiamen, China, to Flushing five years ago, said he is considering buying an apartment at Tangram.
“As long as they have properties similar to the ones back in China, I would buy them,” Lee said in Chinese.
Xiamen, where Lee is from, is a developed port city on China’s southeast coast, with numerous upscale and high-quality apartments, Lee said. He currently rents a one-bedroom apartment at Sky View Parc.
The reputation of Flushing as “a typical Chinatown” still hinders some from buying.
Mimi Wang, who was visiting Flushing from Manhattan for Chinese food with her mother on a weekend, said she went to Sky View Parc’s newest phase, The Grand, with her friends when it went on sale. But she’s going to stick with Manhattan.
“No matter where you are in the world, Chinatown is known for being ‘low,’ dirty and messy,” Wang said in Chinese. As someone born and raised in Beijing, she wasn’t convinced by the glow of luxury condominiums in Flushing.
Ashley Wu, a Chinese student at Queens College, rents an apartment near downtown Flushing with her mother. But she said she wouldn’t have lived in Flushing if it wasn’t for school.
Despite all the options in downtown Flushing, Wu said she prefers food from healthier food chains like Whole Foods.
Helen Lee, whose company has been in Flushing’s real estate business for 30 years, is trying to attract young professionals like Wang and Wu by elevating the retail quality.
The Tangram project will include a 4D-multiplex cinema from the cinema chain CJ CGV, the first cinema to open in the neighborhood in nearly 30 years and also the first location for this South Korea-based company on the East Coast following its two locations on the West Coast.
Helen Lee said they chose to work with CJ CGV because the chain will include movies from Asian countries, as well as Hollywood films with subtitles in Chinese and Korean.
At F&T Group’s previous project, Queens Crossing, near the Main Street subway station, Helen Lee carefully selected vendors for the food hall on the first floor in order to get rid of the cheap Chinese fare that Flushing’s food courts have long carried.
“People love eating healthy now,” she said. “Chinese people only eat Chinese food? That’s not true.”
Since Tangram launched sales in November 2017, more than 50 percent of its first 192 units have been sold, according to SCGA.
Seto said that one key element in Flushing is the Chinese philosophy, “always to own a property if you can.”
“We don’t really like to rent,” said Seto, who was born in Hong Kong.
The idea of owning a piece of property forever appeals to immigrants from China, where people can own their properties for a limited time period. Chinese property laws say that the home owners may own their apartments or houses up to 70 years, but the land that buildings are built upon on belongs to the state. After the 70 years, the owners have to go through a renewal application process with the land administration department.
In China, SCGA has broadcast ads showcasing the “freehold” nature of its properties, assuring owners there would be no time limit to ownership of U.S. real estate.
And, the investment market in Flushing may have room to grow. Data provided by Law show that about 56 percent of Juwai.com’s Chinese buyers who inquire about property in Queens say it is “for their own use” compared to Manhattan’s 45 percent.
Zhi said she heard the price for an apartment one floor above her rose to over $1 million from around $980,000 right after New Year.
It “is that fast,” Zhi said.
