Reuters New York, June 2 - A source reported on Sunday that a consortium involving Chinese real estate tycoon Zhang Xin purchased a 40% stake in a landmark office building in New York for $1 billion, further demonstrating how foreign investors are stimulating the recovery of the U.S. commercial real estate market.
The transaction was completed on Friday, and in the same week, China’s Shuanghui International agreed to acquire the largest pork producer in the United States, SMITHFIELD FOODS INC, for $4.7 billion. If approved, this will become one of the largest acquisitions of a U.S. company by China.
Later this week, U.S. President Obama and Chinese President Xi Jinping are expected to hold talks on trade and other issues, which may further promote Chinese investment.
Sources reported on Sunday that the Sungate Trust, controlled by Zhang Xin’s family, in partnership with Brazil’s Safra family investment firm M Safra and Co Inc, acquired a stake in the General Motors Building, valuing the property at $3.4 billion, making it the most expensive office building in the United States.
Chinese investment in U.S. real estate has been increasing over the past four years and may further rise in the future. Reports indicate that the State Administration of Foreign Exchange, which manages over $3.31 trillion, is considering investing in U.S. commercial real estate.
These investment intentions are good news for the U.S. commercial real estate market. In just the past three days, New York office properties have attracted approximately $2.8 billion in investment commitments.
Earlier, sources indicated that Zhang Xin plans to invest in the General Motors Building using his own assets rather than utilizing funds from Soho China.
This news was first reported by The Wall Street Journal. Attempts to contact a broker from CBRE involved in the General Motors Building transaction, Darcy Stacom, for comment were unsuccessful. Zhang Xin and M. Safra and Co were also not reached for comment. The transaction was completed on Friday.