As investors from China continue to make substantial purchases in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – concern is rising in Washington D.C. over the potential implications this deluge might be having on national security.
To ensure these issues are being fully considered, Senate Banking Committee Ranking Member Sherrod Brown, D-OH, together with Sen. Ron Wyden, D-OR, ranking member on the Senate Finance Committee, and Sen. Claire McCaskill, D-MO., ranking member on the Homeland Security and Government Affairs Committee, requested the Government Accountability Office investigate how the Committee on Foreign Investment in the United States (CFIUS) examines real estate transactions involving foreign investors in the U.S. and Philadelphia commercial real estate markets.
This report on national and Philadelphia commercial properties is being made through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.
The request by those three senators calls for the GAO to assess whether CFIUS is adequately equipped to identify, evaluate and, when appropriate, mitigate, national security risks arising from the “rising tide” of foreign investment in U.S. and Philadelphia commercial real estate properties.
In their letter, the senators note additional national security considerations may exist because several senior administration officials, including the president, retain ownership of significant real estate holdings and maintain multiple residences that could be the subject of foreign acquisitions in the future.
“Foreign investors are pouring more and more money into the U.S. real estate market, and yet the trail behind these transactions is often shrouded in secrecy,” Sen. Wyden said in addressing these issues among both national and Philadelphia commercial real estate listings. “It is critical we have a better understanding of how U.S. agencies identify and address national security threats that may arise about foreign real estate investments.”
“We know real estate deals are one of the favored ways to launder illicit finances,” Sen. Brown said in relation to these same investments in U.S. and Philadelphia commercial real estate listings. “We don’t, however, know if our oversight agencies have the resources and tools they need to vet Russian, Chinese, and other foreign investments in U.S. real estate for potential threats to our nation’s security.”
The senators’ request follows a significant increase in foreign investment in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space. Total Chinese direct investment in U.S. real estate and hospitality is nearly $30 billion, accounting for more than 27 percent of total Chinese investment since 1990, according to a recent report from the National Committee on U.S.-China Relations, an organization that promotes constructive U.S.-China relations founded in 1966.
For more information about Philly office space, Philly retail space and Philly industrial space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) or Lee Fein (lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly office space, Philly retail space and Philly industrial space.
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