The Asian community in Southern California wields significant economic power in the region. There are more than 1.4 million Asians living in Los Angeles County, which accounts for 14.5% of the county’s population. The county’s 489,175 Asian households earn a median household income of $70,440, compared to the county’s overall median of $59,135.
Annual expenditures for food, clothing, housing, and other items among Asian households are less than the rest of the county’s population. The average annual expenditure for Asian households is $49,650 compared to the median of $57,555 for all other households in the Los Angeles County.
More than a quarter of working Asians are in the education and health services industry, which is considerably higher than the 16.5% for all other workers in Los Angeles County. More than 10% of the region’s working Asians are in the hospitality sector, compared with the 8.4% of the remaining working population. About half of working Asians in the county are employed in management, business, science, and art occupations. The second most common occupations are sales and office jobs, accounting for 24.4%. Asians are less likely to be employed by manufacturing or construction firms.
As for buying power in the U.S., Asian-Americans have the third largest spending prowess of all multi-cultural groups at $825 billion, which is expected surpass $1.0 trillion by 2020. According to the Los Angeles County Economic Development Corporation (LAEDC), spending by Asian households in Los Angeles County in 2015 was $21.3 billion, supporting 156,470 jobs with total labor income of $7.0 billion and federal, state and local tax revenues of $3.1 billion.
Chinese investors poured a record $16.4 billion into California in 2016, more than any other state and nearly double the amount invested over the previous 10 years. The Chinese make up 28.5% of Asians in Los Angeles. This is where the boom in Chinese real estate investment is very visible, especially in downtown Los Angeles where new projects in South Park are reshaping the city’s skyline.
In 2017, a new policy announced by China’s foreign exchange regulator could affect all individuals who are looking to buy real estate overseas. Due to falling currency rates, Chinese citizens looking to transfer large sums overseas will now have to fill out an application stating the purpose of their foreign purchases and there will be strengthened punishment for illegal money outflows. These stricter capital controls may actually cause demand for overseas real estate to increase as the wealthy Chinese upper class becomes increasingly nervous about their weakening currency. Property investments in the U.S. still remain top choice for these Chinese investors even as ongoing controls and monitoring are lengthening the time it takes to complete overseas real estate purchases.
The influx of Chinese money into Los Angeles continues to make headlines, but Japanese companies are still the top foreign investors in Los Angeles. The surge in Japanese investment in this area began in the 1960’s and 1970’s, but really shifted into acquisitions of office properties in downtown by the mid-1980’s. By 1986, Japanese companies owned 16 high-rises in downtown, controlling a quarter of the office space in this market. The country’s economy entered into a recession by the 1990’s, causing their high-profile investments to diversify into different sectors of the local economy. The diverse set of investments span from manufacturing and food companies to electronic gaming, software, and logistics. According to the LAEDC, Los Angeles housed more than 200 Chinese companies employing 3,800. This paled in comparison to Japanese with 1,263 local companies, providing 42,000 jobs in the same year.
- In 1976, Cushman & Wakefield was acquired by The Rockefeller Group, a private company real estate operations company based in New York. Mitsubishi Estate, the second-largest Japanese real estate developers, became The Rockefeller Group’s majority shareholder by 1989.
South Koreans make up 15.6% of the Asian population in Los Angeles, more than double the amount of Japanese residents. Jamison Properties, the largest private office landlord in the county, has been on a multi-family building spree in the Koreatown neighborhood of Los Angeles with over a dozen developments. Jamison owns the most real estate in Koreatown and continues to be the most active, filing for 48 projects in Los Angeles last year.
CEO of Korean Air, Yang Ho Cho mentioned that the driving force behind developing the 1,100-foot Wilshire Grand skyscraper was for it to be the icon of the Korean community in Los Angeles. This marks the first time that a South Korean developer has engaged in an endeavor of this magnitude overseas. As the first major high-rise office building constructed in downtown since 1992, this project is testament to the rising clout of Los Angeles’ Korean community, the largest outside of Seoul.
Sources: US Census Bureau, LA County Register, LAEDC, Nielsen, Caritas, Cushman & Wakefield Research