Few have heard of Gerald Chan, but the billionaire investor from Hong Kong has emerged as a major player in the Cambridge real estate market, buying up over $100 million of real estate around Harvard Square within the past couple years – and raising eyebrows in the process.

Chan – a fiercely private Harvard-trained academic who, along with his brother, Ronnie, runs Hang Lung Group, one of the largest real estate companies in Hong Kong – has been ambitious in his investments. Last April, he made news for forking over $33.15 million for 39 JFK St. – essentially $1,511 per square foot for the four-story, 20,570-square-foot building, which houses a Kaplan test preparation center and American Express office. The property was previously owned by former governor Mitt Romney’s aide, Ellen Roy Herzfelder. It was a record deal at the time.

That deal was part of a series of transactions that sheds some light on the powerful influence of international investment on the real estate market in greater Boston. Local real estate magnates often say they just can’t compete with the inflated all-cash offers that foreign investors put on the table. Chan’s investments have created a domino effect: more sellers are emerging, hoping that he will buy their buildings.

“It looks like he’s becoming the Bertha Cohen of the 21st century,” said Daniel Wolf, whose real estate firm represented a trust that owned 1218 Mass. Ave. before selling it to a Chan-related company just last month. Wolf was referencing one of the biggest property owners in Cambridge in the 1960s, a Russian immigrant who was known as the “owner of Harvard Square.”

According to the Association of Foreign Investors in Real Estate, the U.S. remains the most stable and secure country for investment by a wide margin of more than 50 percentage points over the second country, Germany – the widest margin since 2006. According to the survey, the U.S. remains the country providing the best opportunity for capital appreciation by a 26 percent margin over second-ranked Spain. And with resurgent fears of a bubble forming in China, the U.S. is seen by investors as a safe bet.

Chan, who worked as a cancer researcher at Harvard in the 1970s, spends part of his time in the Boston area and the rest of his time in Hong Kong, with significant time spent traveling on business, pumping some of the $2.95 billion he and his brother have amassed into tech and life sciences companies in the U.S., Europe and Asia.

A Larger Vision For Harvard Square

Although Banker & Tradesman made multiple efforts to contact Chan, he was not available due to his “really prohibitive” schedule, according to Reenie McCarthy, an attorney for Morningside Group, Chan’s investment company with an office in Newton. McCarthy said Chan is looking to improve Harvard Square.

“Gerald would like to see the square revitalized,” she said. “He’s very much a community-oriented person.”

McCarthy didn’t elaborate on what that revitalization might entail, but a quick glance at what’s transpired over the past few months does tell at least a piece of the story. 

Using various shell companies, Chan’s company has snatched up blue chip real estate in and around the square, including buildings on JFK and Winthrop streets, one of which houses legendary Harvard University hangout Grendel’s Den. The Winthrop Street property was purchased from Gregory Carr, a tech multimillionaire who has been increasingly focused on philanthropic work in Africa.

McCarthy said the price paid for that property was “under $7 million.”

With the acquisitions of the properties has come some business closings. Upstairs on the Square, a restaurant that announced it was closing shortly after Chan purchased the property, was the first to shutter.

Mary Catherine Diebel, the former owner of Upstairs On The Square, said Chan wanted a new restaurant in the space. Grendel’s, which has been in Harvard Square since 1971, is reportedly staying put; its lease doesn’t run out until 2017.

In the 39 JFK St. property, Leo’s Place Diner, one of the more notable tenants and a favorite of actor Ben Affleck’s, was forced to close after 32 years because the owners say they were unable to get their lease renewed.

“We established a big community,” said Richie Bezjian, who owned and operated Leo’s along with his brother, Raffi. “People met each other in my place. The community doesn’t have to be a neighborhood; it can be a diner.”

Bezjian said his brother had tried to call the new landlord multiple times to try to understand what had happened, but did not get a call back.

“There’s going to be more casualties,” he predicted.

Another tenant in the building, American Express, abandoned its 2,500-square-feet office. The building had been informally known as the “American Express Building” for years. American Express’ decision reportedly had less to do with the new landlord and more to do with changing industry trends: people can wire money or exchange currency at a lot of places.

The building didn’t come cheap either: Chan forked over more than $33 million for the property.

“There’s a lack of office product in Harvard Square,” said Michael d’Hemecourt, partner and president at Boston Realty Advisors, which brokered the transaction. “It’s going to significantly drive pricing, especially with the tenants that you have in there.”

Expanding Portfolio

Denise Jillson, executive director of the Harvard Square Business Association, said that she met with Morningside representatives to discuss their plans for the square.

“We’re delighted to partner with Morningside,” said Denise Jillson, executive director of the Harvard Square Business Association. “They joined the association several months ago, and since then, their team has had interaction with the Harvard Square Business Association, just in terms of meeting with us, asking really good questions and looking for guidance. That’s comforting to us, given the number of properties in their portfolio.”

Indeed, Chan’s investments, which total nine in the Harvard Square area, are expanding:

• Last month, Morningside used a limited liability company called Corliss to snatch up 1218 Mass. Ave., a four-story brick building on the corner of Massachusetts Avenue and Bow Street, for $5.9 million.
• Last November, a Chan-connected LLC spent $13 million to buy 5-7 Remington St. and the boutique Hotel Veritas at 1131 Mass. Ave. in Cambridge. Christopher Slomiak, the general manager of Hotel Veritas, is listed in state documents as the manager of the LLC associated with the property. The property was sold to Morningside by the O’Connell family, who are involved in Quincy’s Marina Bay. The property was last sold in 2008 for $3.9 million, according to data from The Warren Group, publisher of Banker & Tradesman.
• Just a month before, Chan, through Morningside-connected Plumosa LLC, snatched up a multifamily property at 15 Remington St. for $8.3 million, $1.5 million over the asking price.
• In January 2013, Chan, through Alliara LLC, bought 18-28 JFK St., which houses such stores as Papyrus, Uno Chicago Grill and Vitamin Shoppe, for $31.7 million.
• That same month, Chan bought 40 Bow St., a four-story apartment building with retail behind the iconic Harvard Lampoon for $2.95 million.
• In 2012, Chan acquired the Drayton Hall building at 48 JFK St., a retail and apartment building across the street from Winthrop Square, for $16 million through an LLC called Tarragon. Chan’s son, West Coast restaurateur Ash Chan, is opening Night Market, a yakitori restaurant, in the basement of the building in the space formerly inhabited by Indian restaurant Tamarind Bay.

“We’re looking forward to welcoming new businesses to our already exciting, pulsating and vibrant community,” said Jillson.

Not all of Chan’s acquisitions have been around Harvard Square. Some of the properties are sprinkled around Central Square and West Cambridge; others have been outside of Cambridge entirely.

Just last month, a Chan-related company, Prower LLC, purchased a shopping center at 792 Beacon Street in Newton that had been owned for decades for $6.9 million. Last October, Morningside bought 287 Newbury St. in Boston for $3.9 million.

In 2012, Chan bought a portfolio of Brookline buildings at 27-31 Longwood Ave. for $9.2 million and 9 Sewall Ave. for $14.7 million, in addition to 12 Stearns Road for $9.2 million, according to a review of real estate records by The Warren Group.

Chan has roots in the United States. He received his bachelor’s and master’s degrees in engineering from UCLA, and a master’s in medical radiological physics and a doctorate in radiation biology from Harvard University. He completed his postdoctoral training at the Dana Farber Cancer Institute, according to a biography on the New York Academy of Sciences website.

In 1986, Chan cofounded Morningside. “The group began its China investments in 1992 and remains active in China’s Internet, media and life science sectors,” according to Chan’s biography.

Chan, who made it to No. 13 on Forbes magazine’s “50 Richest” list in Hong Kong, was also a major benefactor of Hong Kong’s Morningside College, which was established in 2006. His biggest investments have been in clean tech and the life sciences, but he’s also dabbled in other industries. His portfolio includes The Tile Shop, a chain of flooring shops, and Cambridge-based BiddingForGood, which specializes in online charity auctions. Chan recently gave $6 million in funding to CO Everywhere, a hyperlocal social media smartphone app based in Boston, according to The Boston Globe.

“He has come to understand well the importance of pairing private capital with astute scientific acumen,” said Harvard School of Public Health Dean Julio Frenk in a speech introducing Chan as a commencement speaker at the school’s 2012 graduation ceremony.

He serves on the boards of several biotechnology companies, including Metacure, Matrivax, Critical Biologics, Serica and Vaccine Technologies Inc. He’s a trustee of Fudan University in Shanghai and sits on the advisory boards of the Johns Hopkins University-Nanjing University Center for Chinese and American Studies, the Institute of Mathematical Science of the Chinese University of Hong Kong, and the Physical Sciences Visiting Committee of UCLA.

McCarthy pointed out that Chan has roots in the Boston area. He raised his family in Newton and recently bought a home on Brattle Street in Cambridge.

Although Morningside Group makes no mention of investments in Boston area real estate on its website, the site does mention the firm’s work in historic preservation in Beijing, Shanghai and Hampshire, U.K.

But it’s clear that the Cambridge and Boston are favorites.

Said Wolf, who was involved in the sale of 1218 Mass. Ave. to a Morningside-related company: “They’re looking for quality locations with a long-term focus.”

Email: dharris@thewarrengroup.com

[Editor’s note: In the original version of this story, Victoria Fung is listed incorrectly as the mother of Hotel Veritas general manager Christopher Slomiak. She is not his mother. She is also listed incorrectly as being the owner of the Hotel Buckminster and Nantasket Beach Resort. She does not own either property; Slomiak Enterprises, the company she works for, does own both properties.]