Chinese real estate developer Gemdale Properties & Investment has made its fourth major investment in the US over the last 12 months, and its first in New York, as the Shenzhen-based firm continues to expand its North American footprint.
The state-owned developer handed over $69.9 million for a piece of 45 Broad Street, an 84-story, 1,127-foot (343 metre) supertall tower of residential and office condominiums being built by New York developer Madison Equities, according to a report in the Real Deal citing public records.
Under the terms of the agreement between Gemdale and Madison Equities, the Chinese firm is reportedly taking an 81.3 percent stake in the $442 million project. Together, the development partners expect to invest $100 million in equity into the project, with a Gemdale affiliate tagged to provide another $55 million in financing through the EB-5 investor visa program. The developers are also said to currently be in be in the market for a construction loan.
Reports in June had already indicated that the Shanghai-listed property giant would serve as a developer, as well as an investor, joining Madison Equities, Impresa Pizzarotti & CSpA and AMS Acquisitions in the project. Financial details of that partnership only emerged this month.
The project in lower Manhattan’s financial district is planned to include 206 units, with an average asking price of $2.7 million. In June, Madison Equities had indicated that construction would begin in September this year.
Gemdale Goes Bi-Coastal for US Deals
While New York has already attracted major mainland players such as China Vanke, Greenland Group and Oceanwide Holdings, 45 Broad Street is Gemdale’s first project in the commercial hub.
In May this year Gemdale had entered into a joint venture with US developer Hines to redevelop Boston’s South Station transportation complex, starting with construction of a 51-storey tower. The JV recently announced that plans for the project, which initially called for a majority of space to be used for office development, had been amended to allow more residential units.
The Boston investment was preceded in February by Gemdale’s partnership with US developer Lincoln Property to purchase a plot in San Jose, California for $28.1 million for development into a 415,000 square foot (38,500 square metre) office project. The joint venture was Gemdale’s second cooperative effort with Lincoln.
Last year, Gemdale’s $125 million Hollywood project was one of the only Chinese real estate investments in Los Angeles that came in at more than $50 million. At the time, it ended a year-long drought for Chinese real estate investment in America’s second most populous city.
Bidding Big in Both China and the US
In addition to its rapid expansion in the US, back on its home turf, Gemdale made waves at the start of August by becoming the new “land king” after obtaining a 140,252 square-meter parcel of land in Shanghai for a record price of RMB 8.8 billion ($1.3 billion).
This was the second record setting deal for Gemdale during the past 12 months. In September of 2015, the developer secured a residential site in Shanghai’s Jiading district for RMB 2.01 billion ($315 million). At RMB 18,680 per square meter, with that transaction setting a new price record for housing in the district.