Lennar Corp., one of the U.S.’s largest home builders, is in talks with the China Development Bank for approximately $1.7 billion in capital to jump-start two long-delayed San Francisco projects that would transform two former naval bases into large-scale housing developments, according to people familiar with the discussions.
The negotiations aren’t final and the financing arrangement could still fall through. But if completed, the deal would reflect a changing dynamic between the U.S. and Chinese economies, as an American company turns to China for help funding a long-delayed and partially publicly funded project that otherwise wouldn’t get done.
The CDB and the Lennar partnership have been in discussions to include China Railway Construction Corp., a state-run contractor, in the development of Treasure Island and Hunters Point, according to people familiar with the matter. While it is unclear what CRCC’s role would be, the company could serve as an adviser or in an consulting role, or could possibly even invest in a local construction company that employs U.S. workers, these people said.
With Chinese firms increasingly eyeing opportunities in the U.S. and other developed markets, CDB will likely find itself being approached to fund more deals in the U.S. People familiar with the negotiations said CDB was using the Treasure Island and Hunters Point projects—which both include “green” building and affordable housing components that are of interest to Chinese builders—as a test case to become familiar with what’s required for doing such deals in the U.S.
Full article: Chinese Target U.S. Homes (Wall Street Journal)