Chinese parties in talks for stake in NYC's GM building: sources

NEW YORK Fri Mar 8, 2013 4:16pm EST

The General Motors building is seen in New York March 8, 2013. REUTERS/Shannon Stapleton

The General Motors building is seen in New York March 8, 2013.

Credit: Reuters/Shannon Stapleton

NEW YORK (Reuters) - A group of Chinese investors including Zhang Xin, the chief executive of commercial real estate developer Soho China Ltd (0410.HK), 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 (BXP.N), 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 (GS.N) 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 (6758.T) U.S. headquarters in New York, the Wall Street Journal reported.

Zhang also tried to provide $800 million in financing for Vornado Realty Trust (VNO.N) 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 (AAPL.O) 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)

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Comments (4)
MikeBarnett wrote:
This is a Chinese FDI offer that may run into US political opposition that has no concern for economics. The wierd part is that the current investors are Sunni Arabs from Kuwait, Qatar, and the United Arab Emirates whose citizens join al Qaeda, a Sunni insurgent group, and/or send donations to al Qaeda for its charity work with schools, clinics, rent aid, food aid, and other assistance to muslims in need. The Koran tells muslims to engage in charity and/or to support charity with donations. However, the members of al Qaeda are not Chinese, so that makes them more acceptable to the people of New York City.

If the Chinese offer goes forward, New York will keep its building, the offices in the building, the jobs for its people, the property taxes, the business taxes and fees, taxes on products the businesses and workers buy, and the opportunity to make more money in ways that I haven’t listed.

Mar 08, 2013 6:41pm EST  --  Report as abuse
ncshu2 wrote:
Another sign of the bubble bursting of the Chinese real estate market? Even the Chinese real estate developer tycoon shuns the market in her own country, instead put her dough in US. Interesting.

Mar 09, 2013 1:46am EST  --  Report as abuse
CountryPride wrote:
Chinese and other foreigners should not be allowed to own land or property in the US the same as Americans are not allowed to own land or property in China but instead can only lease the property for a number of years. If we can own land there they shouldn’t be able to own land here. The fools in our government are selling us out for pennies on the dollar and we will soon be left with nothing an nowhere to go.

Mar 09, 2013 9:53am EST  --  Report as abuse
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