China's largest residential real estate brokerage has selected the Chicago area for its first American office in a bid to establish a direct sales channel for Chinese investors eyeing U.S. property.
5i5j Realty, a division of Beijing-based 5i5j Group, has opened an office in the Chicago suburb of Buffalo Grove, Illinois. Ellen Phillips is an American who is vice-president and the managing broker for the office.
By the end of March, the company also expects to open another office in downtown Chicago and employ 10 people at both locations.
"We will have both Chinese and American agents on our staff," Phillips said in an interview Tuesday. "Eventually we will open offices in other locations as well."
While the offices will focus on the Chinese community in the Chicago area, Phillips said 5i5j intends to utilize its 50,000 agents and more than 3,000 offices on the mainland to help drive sales.
"Some business will be done locally (in Chicago), but we will also team up with new-home builders to market their inventory in China," Phillips said.
Phillips said the Chinese are eager to invest in American real estate. "People in China are reluctant to put their money in the stock market - they would rather buy property," she said.
Chicago was an ideal location for 5i5j's first US office because it has ample inventory in its suburbs in the 0,000 price range, which is optimal for many Chinese buyers, according to Phillips.
Because there is a limit of ,000 that each Chinese can take out of the country, that means a family of three will have about 0,000 to invest, she added.
"Our sweet spot is new construction at around 0,000, because the Chinese like to buy new construction," Phillips said.
Jim Ascot, who heads his own real estate company and is a past president of the Chicago Association of Realtors, said the area has been successful in attracting Chinese in part because of a 2013 initiative from Chicago Mayor Rahm Emanuel that produced economic partnerships with eight major Chinese cities.
"Many Chinese residents also send their children to Northwestern University or the University of Chicago," he said in an interview. "We also have daily direct flights to China from O'Hare International Airport."
Ascot said the major real estate brokerages in Chicago such as Century 21 and Coldwell Banker employ agents who focus on an ethnic community.
"This will be different because the office is owned by a Chinese company. I see no reason why they shouldn't be successful," he said.