Kuafu Properties has made four deals in Manhattan in its two years in business

Kuafu Properties is making its mark on New York real estate.

The Chinese investment firm, formed two years ago, has made four deals in Manhattan, most recently in 2014 for a string of buildings on the Upper East Side.

Kuafu bought six contiguous buildings on East 60th Street near Lexington Avenue from the World Wide Group in a deal scheduled to close in October. The reported price was $300 million, according to The Real Deal, a real estate newspaper in New York.

World Wide Group is a Midtown East-based development firm founded by Victor Elmaleh and now led by James Stanton.

Robert Knakal, the broker for the property, said Kuafu won the contract due to its reaction speed. "They just moved faster than anybody else," said Knakal.

Kuafu, which shares an office in Times Square with the law firm Dai Associates, signed the contract and paid the deposit only two weeks after an e-mail inquiry was sent.

Kuafu was founded in 2013 by Dai Shang and Shan Zengliang with the support of Chinese state-owned companies, including the Shanghai Construction group and China Cinda Asset Management Company Ltd, along with some wealthy individual investors from China.

Both founders are originally from the northern port city of Tianjin. Dai told Crain's New York business that Kuafu is "very different from other Chinese companies. We know the US much better."

Kuafu will demolish the buildings from 143-161 E. 60th Street, build condos and add about 5,570 square meters of retail space, according to Crain's.

In July, Kuafu agreed to buy One MiMA Tower, a luxury rental on West 42nd Street that it will convert to condos. Kuafu also is building a hotel/condo tower called Hudson Rise on 11th Avenue and a residential/retail building at 86th Street and Lexington Avenue.

Kuafu is looking to make more acquisitions, in Brooklyn, New Jersey and Washington. Dai said that the land and property prices in Manhattan are already too high, and that Kuafu's next two projects might be rentals.

Dai told Crain's that it would be "a bit unrealistic to continue to chase condo deals, unless they are in great locations or have perks such as Central Park views".

Chinese investment in US real estate has surged in the past few years, with deals including Anbang Insurance Group's $1.95 billion purchase of the Waldorf Astoria hotel and the sale of 1 Chase Manhattan Plaza to Fosun International for $725 million, both in New York.

According to a report by Deloitte, from January 2005 to March 2014, Chinese investors acquired $8.5 billion worth of US commercial real estate. Of that figure, $5.8 billion was invested from January 2013 through March 2014. Chinese buyers surpassed Canadians this year as top foreign buyers of US commercial real estate.

A new Qualified Domestic Individual Investor program in China allows individuals from some big cities to invest directly in overseas assets such as stocks, bonds and real estate. In the first quarter of 2015, Los Angeles, New York City, Houston, San Francisco and Orlando were the top destinations for Chinese real estate buyers.

"With QDII2 in mind, within five years we might look back and think of the current levels of Chinese cross-border investment as quaint," said Andrew Taylor, co-CEO of Juwai.com, a website that helps Chinese to buy properties abroad.

He said that the US is the best-situated country to capture that business because of its large inventory of real estate, potential for new construction and liberal foreign ownership rules.

Kuafu's plans for the East 60th Street buildings sparked a local controversy last year, because one of the buildings housed a beloved dive bar called the Subway Inn, which had been in business since 1937.

The bar's pending closure drew significant media attention and spurred an online petition and crowd-funding campaign to save it. The story ended happily in February when a new location opened on Second Avenue a couple of blocks away.

renqi@chinadaily.com.cn

(China Daily USA 08/07/2015 page2)