China’s hunger for real estate in global gateway cities was demonstrated again this week when word leaked that the Bank of China is purchasing a Manhattan office tower for a sum said to approach $600 million.
The big four Chinese state-owned bank is said to have reached agreement on Friday to buy the soon-to-be completed 7 Bryant Park building from Hines, the US company which developed the building with backing from an asset management firm belonging to JP Morgan Chase.
Bank of China’s acquisition is the latest in a string of major purchases of Manhattan real estate by Chinese investors, as New York continues to be the favorite US target of cashed-up companies fleeing China’s slowing property market.
New York’s First $600M Condo?
The bank is said to have purchased the 470,000 sq ft (43,663 sqm) building after first inquiring about renting 200,000 square feet of the building as an anchor tenant, according to a story in the Wall Street Journal.
7 Bryant Park was designed by Henry Cobb of famed New York design firm to be a “trophy-class” office tower, and is located at the corner of Bryant Park and Avenue of the Americas in Midtown Manhattan.
Hines developed the building in partnership with Pacolet Milliken Enterprises which owns the land that the structure was built on, making 7 Bryant Park technically a long-term leasehold.
Although the $1,300 per square foot paid by Bank of China is below the rates seen in some comparable recent transactions, the Journal article points out that 7 Bryant Park’s office have yet to be fitted out, which will add to the bill for the new owners.
Chinese Not Yet Done Buying Manhattan
Despite a rush of sales that has driven up prices in gateway cities such as San Francisco, Los Angeles, and New York, Chinese buyers apparently still see opportunities in Manhattan real estate.
The purchase of 7 Bryant Park is the fourth major acquisition of a landmark-class New York property by Chinese investors in less than two years, and Chinese developers have also picked up several projects in America’s largest city.
In October this year China’s Anbang Insurance bought New York’s Waldorf Astoria hotel for a record $1.95 billion, cementing the city’s status as the leading US destination for Chinese real estate investment.
During 2013, Shanghai’s Fosun bought One Chase Manhattan Plaza for $725 million, and Soho China CEO Zhang Xin joined a consortium of investors that acquired 40 percent of the GM Building in a deal that valued the New York tower at $3.4 billion.
On the developer side, Shanghai’s Greenland Group bought part of Brooklyn’s $4 billion Atlantic Yards project, Dalian Wanda acquired a site for a $1 billion hotel and NYSE-listed Xinyuan Real Estate also picked up a Brooklyn project.
Hines Developing Significant China Ties
The 7 Bryant Park transaction also marks the second time that Houston-based Hines has benefited from working with the Chinese in New York.
In February this year the privately held real estate firm was joined by partners China Vanke and Cinda (a Chinese “bad asset” bank) in breaking ground on a 61-storey tower in Manhattan, together with New York local partner RFR real estate.
Hines also has operations in China and in 2013 beat out Beijing-based developer Soho China to acquire a 17,937 square metre site in central Shanghai’s Jing An district for RMB3.7 billion ($22.9 billion). The US company plans to develop a 156,000 square metre mixed-use project on the site.