When Xinyuan Real Estate paid $54 million for a Williamsburg development site in 2012 with plans to build a luxury condominium, the project was heralded as the first go-it-alone venture by a mainland Chinese firm. Two more deals — including last summer’s $66 million acquisition of the RKO Keith’s Theater in Flushing — gave the publicly-traded firm nearly 1 million square feet of New York condo product in its pipeline.
But in recent weeks, the company has dismantled the team running its U.S. development arm, known as XIN Development, several sources told The Real Deal. And following the departure – some were let go, others moved on – of several key executives, XIN has turned over the management of three New York City projects to Kuafu Properties, a four-year-old development firm backed by Chinese private equity.
Precise terms of the deal with Kuafu weren’t disclosed, but Xinyuan said it would retain ownership of the projects.
Sources said that headwinds in the condo market could impact the developer’s other projects — specifically an ambitious plan to redevelop the long-shuttered RKO Keith’s Theater. “The project is stalled and there are landmark issues,” said a broker who has worked with Xinyuan.
After paying $175 per foot for the site in August 2016, plans called for tearing down most of the theater and building a 16-story condominium with 269 luxury units, priced between $1,150 and $1,300 per foot.
But just a few months after announcing the deal, Liang said he saw “danger” in the U.S. real estate market. “With its seven- to eight-year cycle, you get a sense now that it’s peaking,” he told the Wall Street Journal.