An­bang buys Man­hat­tan of­fice tower

China Daily (Canada) - - FRONT PAGE - By JACK FREIFELDER in New York jack­freifelder@

An­bang In­sur­ance Group Co Ltd has bought an of­fice build­ing in New York City, re­port­edly for be­tween $400 mil­lion and $500 mil­lion, in one ofMan­hat­tan’s most de­sir­able ar­eas, ac­cord­ing to real es­tate ex­ec­u­tives.

The tower is at 717 FifthAv­enue on East 56th Street, known as the Plaza Dis­trict be­cause of the nearby Plaza Ho­tel. An­bang’s deal is for 22 floors of the 26-story build­ing above re­tail space along Fifth Av­enue, which is separately owned and used by luxury fash­ion brands Dolce & Gab­bana and Armani.

An­bang ac­quired the prop­erty from New York-based Black­stone Group LP, a pri­vate­firm, Crain’s New York Busi­ness re­ported last week. The price was not dis­closed, but Bloomberg News re­ported it could ap­proach $400 mil­lion to $500 mil­lion.

“The dis­trict be­tween 5th and 6th Av­enues has been de­sir­able for­ever, and it’s be­com­ing more de­sir­able,” Howard Dolch, ex­ec­u­tive vice-pres­i­dent of the New York-based Lansco Corp, said. “The Crown Build­ing just sold for a record-set­ting num­ber, so in­ter­na­tional in­vestor money is at­tracted to ‘Class A’ prop­erty. It’s as sim­ple as that.”

The re­tail and of­fice space in the Crown Build­ing — one block north and smaller than 717 Fifth Av­enue — sold for $1.75 bil­lion.

Alan Vic­tor, an ex­ec­u­tive vice-pres­i­dent with Lansco, said for­eign buy­ers are go­ing af­ter top US prop­er­ties, with deals such as An­bang’s pur­chase of the Wal­dorf As­to­ria NewYork ho­tel in Oc­to­ber.

“That’s what’s go­ing on in the mar­ket,” Vic­tor said. “Usu­ally in­vest­ments are made on a long-term re­turn ba­sis, so some are will­ing to pay more in the sale and then wait for the mar­ket to catch up with them.”

Nearby stores to the prop­erty ac­quired by An­bang in­clude Tif­fany & Co, Gucci, Abercrombie & Fitch and jew­eler Harry Win­ston. Some of the ten­ants at 717 Fifth Av­enue in­clude Bank of Amer­ica Mer­rill Lynch, JC Flow­ers & Co, a pri­vate-eq­uity firm and Is­land Cap­i­tal Group, an in­ter­na­tional real es­tate mer­chant bank.

An­bang is a lead­ing Chi­nese in­sur­ance com­pany. It was founded in 2004 and it is based in Bei­jing. The com­pany has made a num­ber of high­pro­file pur­chases in the past sev­eral months, in­clud­ing a $1.95 bil­lion deal with Hil­ton World­wide Hold­ings Inc for theWal­dorf As­to­ria.

The price is the largest ever paid for a US ho­tel, ac­cord­ing to re­search group Lodg­ing Econo­met­rics.

The pri­vately held in­surer is con­sid­er­ing an ini­tial public of­fer­ing, which could gar­ner as much as $2 bil­lion, ac­cord­ing to Bloomberg News.

Ted Li, ex­ec­u­tive direc­tor of cap­i­tal mar­kets for Cush­man & Wake­field Inc, said that An­bang’s se­ries of in­ter­na­tional ac­qui­si­tions are help­ing the com­pany po­si­tion it­self as a global gi­ant with mul­ti­ple in­vest­ments in in­sur­ance and real es­tate.

Li, who over­sees the global com­mer­cial real es­tate firm’s daily op­er­a­tions in Bei­jing, said many Chi­nese com­pa­nies have en­coun­tered a num­ber of prob­lems in the process of glob­al­iza­tion, in­clud­ing cul­tural con­flicts and law­suits, which An­bang might also face. An Baijie in Bei­jing con­trib­uted to this story.

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