China Vanke, the mainland’s second-largest developer by sales has entered into two new projects in New York – both in Brooklyn – as the Shenzhen-based company famous for building homes for China’s middle class continues to expand its global portfolio.
For these latest US projects the Chinese giant teamed with New York players Adam America Real Estate and Slate Property Group to acquire a site at 8-16 Nevins Street in Brooklyn for $47.75 million, as well as having picked up a site in Brooklyn’s Park Slope neighborhood from the same partners, according to an account in Crain’s New York Business.
The three parties plan to work together to begin building a 150-unit, 16,700 square metre (180,000 square foot) residential tower on the Nevins Street site early next year, after acquiring the project complete with plans and approvals from the previous owner.
Vanke Moves Beyond Core Locations
These latest projects by Vanke may give a vision of what to expect from other Chinese developers moving into the US market, as the industry heavyweight appears to be moving beyond big-ticket projects in Manhattan, to medium-sized developments one borough over in Brooklyn.
Vanke, which first entered the US market in 2013 by teaming up with Tishman Speyer for the $620 million Lumina project in San Francisco, moved into Manhattan in February 2014 by investing in a Norman Foster-designed residential tower on Lexington Avenue with Houston-based Hines and New York developer RFR Holdings. After taking on that 61-storey high end condo project, Vanke followed up by acquiring the Bush Tower in Manhattan during April this year, with some observers speculating that the Chinese firm intends to redevelop the partially occupied, historic office building for residential use.
Now, however, with competition growing for center-city assets and capital values rising rapidly, Vanke appears to be moving beyond core locations to build its portfolio. However, rather than try to cover a broad geographic area with a limited-size team, the developer seems to prefer taking a cab over to Brooklyn, rather than jumping on the plane to Dallas, Atlanta or Chicago and trying to familiarise themselves with another economy.
Going for a Hat-Trick in Brooklyn
The Nevins Street site will now be Vanke’s second Brooklyn project, both of which have partnered the Chinese firm with Adam America and Slate.
The three parties teamed up to close on the purchase of the Nevins Street site from Israel Neiman and a family of investors tied to the Colibri Group. Adam America and Slate had first entered into contract to buy the site in July of this year.
According to executives at Adam America, before this latest transaction, the two companies had already sold another site in Brooklyn to Vanke, at 251 First Street in the Park Slope neighborhood. The two New York developers revealed just two weeks ago that they had scrapped their earlier plans to build rental units on the property, and instead had recently received approval to build the 6,000 square metre (65,000 square foot) project into 44 condo units.
Vanke is said to have hired the two US firms to manage the development process on the Park Slope project. An executive at Adam America also revealed that his firm is working with Vanke on a third New York acquisition, a condo conversion in Manhattan which has yet to close.
Is Brooklyn the Shoreditch of America?
This flurry of New York deals comes at nearly the same time that Vanke has entered into its first project in Europe. In a deal that was revealed just two weeks ago, the company founded by entrepreneur Wang Shi announced last month that it had invested more than £30 million ($46.4 million) to acquire a stake of just over 20 percent in a mixed-use project in an up-and-coming area of London.
The project in London’s Shoreditch area bears some parallels with Vanke’s ventures into Brooklyn with the Chinese company having chosen a rapidly gentrifying location in the British capital, where it could team with some established local players. Shoreditch, which lies just north of London’s traditional financial district, was once considered a questionable area of town, but lately has become home to offices for many tech companies looking for affordable office space.
Besides its projects in the US and the UK, Vanke has also ventured into Singapore and Hong Kong – where the company now has three developments.