15 of China’s Top US Trophy Buys This Year
Since 2012, Chinese investors have been on a US real estate spending frenzy, piling up trophy assets across the country and quickly becoming the No. 1 foreign buyer of US properties. Given China's recent stock market turmoil—as well as Barclays' predicted slowdown of the real estate market—experts expect even more in the coming years. Bisnow spoke to Real Capital Analytics to get 15 of the top Chinese trophy acquisitions in the US.
1. General Motors Building, New York City
Location: Located at 767 Fifth Ave in Manhattan, the GM building occupies an entire city block and with views of Central Park.
Background: The 50-story building has over 1.75M SF for rent, and had been the home for General Motors since 1968, until it was purchased by Donald Trump and Conseco in 1998 for $878M. It was then repurchased by the Macklowe Organization in 2003 for $1.4B. In 2008, after a credit crisis, Macklowe put the building back on the market. It was picked up for a 2008 record $2.8B by Boston Properties CEO Mortimer B. Zuckerman, Middle Eastern nations Kuwait and Qatar, Goldman Sachs Real Estate, and Dubai-based REIT Merhaas Capital. The building's featured many unique exhibits and stores, including a GM showroom and the former location of FAO Schwarz, which closed this year. It was also the home to CBS's Early Show from 1998 to 2012. Famous tenants of the building include the Apple Store (which sits in the famous glass cube in the courtyard), Estee Lauder, IMG, Icahn Enterprises and York Capital Managment.
Chinese Intervention: In 2013, Beijing-based real estate developer Soho China worked with Boston Properties and the Safra Brazilian real estate family to purchase a 40% stake in the building. At $1.4B it was the largest direct purchase of US real estate by a Chinese investor at the time.
2. Waldorf Astoria, New York City
Location: Located in the heart of Manhattan, the Waldorf Astoria sits among New York's most famous monuments.
Background: An icnoic New York site, the hotel's been a mainstay for A-listers like Frank Sinatra, Elizabeth Taylor, John Wayne and Gregory Peck. In addition to housing showtime royalty, the Waldorf's also served as hotel of choice of actual royalty, US presidents (Herbert Hoover lived there for 30 years after his presidency), diplomats, politicians, and every other kind of famous person one can imagine. It has been the backdrop for multiple films and television shows—from Analyze This and The Royal Tenenbaums to The Sopranos and Sex and the City—and even the breeding ground for many culinary geniuses, like Oscar Tschirky, who singlehandedly created the Waldorf salad, Eggs Benedict and Thousand Island Dressing.
Chinese Intervention: In a shocking move, Beijing-based insurance company Anbang purchased the hotel for $1.95B in October 2014, making it the most expensive hotel ever purchased in the US. Anbang plans on renovating the hotel to include condos.
3. Park Avenue Plaza, New York City
Location: The building sits between 52nd and 53rd streets in Midtown Manhattan, only a block away from the Palace Hotel and prominent New York landmark St. Patrick's Cathedral.
Background: The 45-floor, 30k SF building was constructed in 1981 and features numerous financial firms (Morgan Stanley, BlackRock, Evercore, among others), as well as a waterfall-side arcade and luxury retail space. The building sits upon top of the palacial, Renaissance-style Tennis and Racquet Club. The club, which has been on Park Avenue since 1918, is notorious for its men-only membership, refusing to allow top female tennis player Evelyn David to train there in 1987. It's also where the official rules of backgammon were created in 1931.
Chinese Intervention: In 2011, Chinese magnate and Soho CEO Zhang Xin paid $600M for a 49% stake in the building.
4. 28 Liberty Street, New York City
Location: The building is now known by its street address in Manhattan's Financial District, but was known for the longest time as One Chase Manhattan Plaza.
Background: The 60-floor buildng was catalyzed by Rockefeller descendant and former Chase CEO David Rockefeller back in the 1960s. Before its sale, the building was occupied by the merged JPMorgan Chase & Co., as well as several other firms, like Assurant, Allianz Global and Corporate Security and MSCI. The mammoth black obelisk design sticks out distinctly from the rest of the area's buildings, and is the 15th-tallest building in New York.
Chinese Intervention: In late 2013, Shanghai-based Fosun International bought the building for $725M, quickly rebranding it to distance itself from the Chase moniker. Back in April, Fosun announced that its first tenant would be Ironshore, an insurance company in which Fosun has a 20% stake. Ironshore will occupy three floors in the building.
5. 7 Bryant Park, New York City
Location: The building will be right in the center of Manhattan, with a short walk to most metro stations, as well as the Times Square, the Port Authority, and Grand Central and Penn stations.
Background: The hour glass-shaped building will feature 30 floors, a multi-level penthouse, terraces on the 10th floor and various other amenities. The building will focus on nature and green space, featuring not only various views of the nearby park (as well as the Empire State Building), natural light and high ceilings, but a "living wall" with various forms of plant life in the lobby as well. At street level, rather than retail space, there will be a public sitting area under a canopy with multiple screens with landscapes shown. The concave northeast corner of the building will be illuminated in different colors at night.
Chinese Intervention: Last year, upon seeing the development of the building over the years, the Bank of China decided to purchase the first 14 floors for $600M. The bank will be on the ground floor, with frontage on the Avenue of the Americas. This was supremely lucky for developer Hines, who started building in 2012 without any plans or tenants. The building will be opening soon.
6. Pacific Park, Brooklyn, New York
Location: Located in Prospect Park, Brooklyn, the massive, 22-acre development will surround the Barclays Center.
Background: Once known as Atlantic Yards, the mixed-use development will include infrastructure as well as retail, residential and office. At 8M SF, the 15-building complex will allow for 6,000 apartments, 8 acres of open space for parks, basketball courts and other activities, as well as a public school, a healthcare center, and a massive travel hub.
Chinese Intervention: Shanghai-based Greenland Holding Group purchased a 70% interest in the project from Forest City Ratner Co in 2013. While Greenland will be supplying the cash, Forest City Ratner continues to manage the project. At the time of purchase, none of the planned buildings had been built. With a projected 2016 completion date, it's expected to cost over $4B. The Barclays Center, owned by Russian billionare Mikhail Prokhorov, wasn't included in the deal.
7. 9900 Wilshire Boulevard, Beverly Hills, CA
Location: In the center of Beverly Hills, the development will be a short distance from both the Los Angeles Country Club and the Beverly Hilton Hotel.
Background: The site has had a troubled history since its original development in 2004, changing hands multiple times and experiencing multiple delays and revisions of plans and designs. Under its new ownership, the development is expected to act as a "gateway site," incorporating both an international and local image. With environmentally friendly designs created to improve ventilation and sunlight, and a unique design that both mirrors and stands apart from the surrounding buildings, the property will be a unique hybrid with all the luxury amenities for the modern age.
Chinese Intervention: In September 2014, China's largest commercial property developer, the Wanda Group, purchased 8 acres of land at the property for $420M, planning a $1.2B condominium and 134-room hotel development known as One Beverly Hills. The Group owns around 70 hotels in China, as well as the AMC chain of movie theaters, and has stated that the property could be its first step into Hollywood, including a HQ for the company's entertainment-related businesses. Ironically, the development will be located next to a new Waldolf Astoria.
8. 717 Fifth Avenue, New York City
Location: As the website puts it, the building is "ideally located in the heart of Midtown, steps from Central Park, Rockefeller Center and the glamour of Fifth Avenue."
Background: The impressive 26-story, 35k SF office building holds some of the top finance firms in the US, including Merrill Lynch Bank of America, JC Flowers, Corsair Capital, Island Capital and Wesley Capital.
Chinese Intervention: After sitting on the market for two years, Anbang—the same company behind the purchase of the Waldorf—snagged the property in May 2015 for $415M. Earlier in the year, Anbang worked with Blackstone to acquire the office portion of the building on 56th Street.
9. 225 Bush Street, San Francisco, CA
Location: The historic building is in San Francisco's Financial District.
Background: Originally known as the Standard Oil building, the 21-story building was the tallest in the city from 1922 until 1925, when it was surpassed by the Pacific Telephone Building. Designed for John D. Rockefeller and his company, Standard Oil (now Chevron), the building was modeled after New York's Federal Reserve Building and features two wings. Despite its age, the building holds some interesting amenities, including gym and shower facilities and valet parking. Famous tenants include streaming service Twitch, Groupon, Wells Fargo, RocketSpace and Zillow.
Chinese Intervention: Last May, Chinese development group Kylli—backed by the the Genzon Group—paid $350M to acquire the property from the German Flynn Properties. It had only recently purchased the property for $212M in 2012, and still retains minority ownership and will continue to act as a leasing agent on the property.
10. 311 South Wacker Drive, Chicago, IL
Location: Standing tall in the Windy City, 311 South Wacker shows that the Chinese are clearly moving inland with their acquisitions.
Background: Completed in 1990, the 60-story building contains both residential and commercial tenants, and features three levels of underground parking as well as a "winter garden" lobby, where palm trees survive the brutal winds and winters. The building's "crown"—made up of five cyllinders—lights up with various colors at night.
Chinese Intervention: Cindat Capital Management—the subsidiary of China Cinda, a "bad bank" that works out failed loans with state firms—worked with Chicago-based Zeller Realty Group to acquire the building for $304M in 2014. At the time, the owners were locked in a legal battle as the market value of the building was rising, making the alliance with Zeller and the acquisition an opportunitistic and intelligent move.
11. 1180 Avenue of the Americas, New York City
Location: Located on the eponymous avenue and only a few yards away from Rockefeller Plaza, Bryant Park, and huge finance firms and corporations, the buildng is right on the lifeline of New York corporate industry and accessible by countless transportation hubs.
Background: The 22-floor building, with massive windows that allow for plenty of natural light, includes tenants like New York Life and Scripps Interactive, the corporation behind HGTV and The Food Network. Fomer CBS reporter Dan Rather relocated Dan Rather Reports to the office last year.
Chinese Intervention: In 2011, as the building was facing foreclosure, the real estate arm of Chinese airline HNA swooped in to save it, paying $246M for the tower, Real Capital Analytics tells Bisnow.
12. One MiMA Tower, New York City
Location: The MiMA tower resides on specific floors (the 51st to 63rd) of a massive 42nd Street skyscraper in New York.
Background: The MiMA is an experiment in what the building's site calls "ultra luxury." With a Rockwell Group-designed interior, a screening room, an Equinox private fitness center, a catering kitchen and a dog daycare service called "Dog City," the MiMA is going above and beyond when it comes to pampering residents.
Chinese Intervention: Kuafu Properties—a New York-based Chinese investment firm—purchased the floors of the MiMA tower only a few weeks ago, with plans to renovate and open them as condos.
13. Baccarat Hotel, New York City
Location: The Baccarat has its finger on the pulse of Manhattan's artistic culture, only minutes away from Radio City Music Hall and the Museum of Modern Art.
Background: Designed by Paris creative team Gilles & Boisser, the Baccarat walks a fine line between European flamboyance and American modesty, finding a perfect sweet spot of elegant luxury that never becomes gaudy or austere. The hotel, which opened in March of this year, is still undergoing development, with certain amenities, such as the 50-foot pool surrounded by day beds and hand-painted walls, still inaccessible to guests. However, the amenities that are open—such as the French fine-dining restaurant Chevalier—are drawing rave reviews.
Chinese Intervention: The Sunshine Insurance Group, China's seventh-largest insurance group, bought the Baccarat Hotel from Barry Sternlicht's Starwood Hotels this past February for $230M, coming out to about $2M per room.
14. One Hundred East Fifty Third Street, New York City
Location: The building formerly known as "610 Lexington Avenue" is in Midtown Manhattan near the landmark Seagram building.
Background: The building, once completed, will have up to 62 stories and 94 condos, but progress has been stalled multiple times—the financial crisis of 2007 and poor housing market caused the project to be put on hold from 2009 to about 2012. It's expected to open in 2017.
Chinese Intervention: China's largest real estate developer, the Shenzhen-based China Vanke, broke ground on its first New York project with US partners Hines and RFR Holdings in 2014. At the time, the developer announced it's planning to be an involved manager, and would be looking for both domestic and international buyers, starting sales this fall.
15. 125 Greenwich Street, New York City
Location: Located in the heart of New York's Financial District, the skyscraper will sit just two blocks from One World Trade Center.
Background: The supertall skyscraper will be a residential building, with 77 floors and 128 units. At 1,358 feet, it will be the fourth-tallest building in New York, surpassing the Empire State Building by 108 feet. It will feature ten full-floor penthouses at 5.3k SF each. No completion date has been set.
Chinese Intervention: There are many partners involved, including mystery ones from the Far East. An unnamed Singaporean bank, an Indian private equity firm and an unidentified Chinese company kicked in equity in addition to stakes held by developer Michael Shvo; co-developer Bizzi & Partners; and Howard Lorber's investment firm, New Valley. The development has had a troubled history, but with solid backing, the project has finally started construction with an expected 2017 open date.