A major Chinese home builder is making a $1-billion bet on the U.S. housing market, and it visited Los Angeles on Thursday to celebrate.
Landsea Group is launching three housing developments - in Dublin, Calif., in the east San Francisco Bay Area, and in Weehawken, N.J., across the Hudson River from Manhattan - with plans to invest $1 billion in U.S. home building over the next few years.
The launch, which Landsea represents one of the first forays by a big Chinese builder into the U.S. single-family home market.
"We have already established our presence in Asia and Europe, but there is no better housing market than the United States, where home ownership will always be a part of the American dream and a cornerstone of economic prosperity," said Landsea Chairman Tian Ming, who was wrapping up a 12-day visit to all three U.S. sites.
Tian founded the Nanjing company in 2001 and has built it into a big player in China's housing market, constructing about 12,000 homes a year with revenues of nearly $2 billion. Landsea also builds in Hong Kong, Germany, and now the U.S.
Here, Landsea is starting work on as many as 187 units - 152 single-family homes and a 35-unit "active adult" project - which will be finished in 2015, said John Ho, managing director of Landsea's U.S. subsidiary. The company is targeting entry-level domestic U.S. buyers - not just the burgeoning market of Chinese buying homes in Southern California - he said.
"From our research, Chinese customers in the U.S. don't want to live in a 100 percent Chinese community," Ho said. "We think we'll sell maybe 30 percent to Chinese buyers."
Los Angeles has seen a recent surge in Chinese investment in real estate, with several major downtown projects in the works by Chinese developers. Investment in single-family home building has been slower, though.
Ho said Landsea sees potential to grow in the U.S. and wanted to diversify its holdings beyond China, where development has grown very expensive. The company is also scouting sites in the Boston and Washington markets and plans to grow more in Southern California, the Bay Area and New York too.
"We believe in the U.S. housing market," he said. "We'll make more significant large announcements in the markets we're in, and we'll continue to expand."