Chinese parties in talks for stake in NYC's GM building: sources
03/08/2013| 04:16pm US/Eastern
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A group of Chinese investors including Zhang Xin, the chief executive of commercial real estate developer Soho China Ltd (>> SOHO China Ltd), are in talks to buy a 40 percent stake in the iconic General Motors building in Manhattan, two sources familiar with the matter said.
A group of Chinese investors including Zhang Xin, the chief executive of commercial real estate developer Soho China Ltd (>> SOHO China Ltd), are in talks to buy a 40 percent stake in the iconic General Motors building in Manhattan, two sources familiar with the matter said.
The deal would value the GM building at $3.4 billion, the sources said, making the 50-story office building on Fifth Avenue near Central Park the most valuable office building in the United States.
The sellers are a group of Middle Eastern investors that own 40 percent of the building, said one of the sources.
The other 60 percent is owned by landlord Boston Properties Inc (>> Boston Properties, Inc.), which paid $2.8 billion to acquire the GM building from Macklowe Properties in 2008.
The sovereign wealth funds of Quatar and Kuwait invested in that deal through a Goldman Sachs Group Inc (>> Goldman Sachs Group, Inc.) entity, as did a private-equity firm affiliated with the ruling family of Dubai.
Zhang has shown more interest in U.S. properties than other big Chinese investors, who have generally avoided direct purchases of U.S. real estate even as other foreign buyers have been active. She is investing in the GM building with her own personal wealth, not Soho China's funds, one source said.
Zhang's family acquired a 49 percent stake in Park Avenue Plaza in 2011 for nearly $600 million and was also part of a group that acquired Sony Corp's (>> SONY CORPORATION) U.S. headquarters in New York, the Wall Street Journal reported.
Zhang also tried to provide $800 million in financing for Vornado Realty Trust (>> Vornado Realty Trust) to build an office tower above the Port Authority bus terminal in Midtown Manhattan, but that was project was ultimately scrapped.
The GM building is seen as one of the marquis properties in Manhattan commercial real estate. Located at the south-east corner of Central Park, with Apple Inc's (>> Apple Inc.) flagship store at its base, the building occupies a full city block and has nearly 2 million square feet of rentable space.
(Reporting By Ilaina Jonas; writing by Lauren Tara LaCapra; Editing by David Gregorio)
By Ilaina Jonas
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