China's Fosun buying NYC bank landmark for $725 million

A company headed by a Chinese billionaire is paying $725 million for a banking landmark in New York City's financial district, the latest high-profile US real-estate deal by a Chinese business.

Fosun International - the investment firm controlled by Guo Guangchang - will acquire One Chase Manhattan Plaza, the company said Friday. The 60-story, 2.2 million square-foot office tower on a 2.5-acre plaza is the former world headquarters of Chase Manhattan Bank and a signature piece of the city's financial district.

In a statement announcing the acquisition, Shanghai-based Fosun called the property "one of the few high-end landmark office buildings in New York City".

The purchase is the latest acquisition by Chinese property developers looking abroad to diversify amid a slowing economy in China and tight policy measures aimed at cooling an overheated housing market in the country.

Earlier this month, Shanghai-based Greenland Holdings Group agreed to buy a 70 percent interest in an apartment project potentially valued at more than $5 billion in the New York City borough of Brooklyn. In June a group led by Beijing real-estate tycoon Zhang Xin acquired a 40 percent stake in the most expensive US building - the General Motors office tower in midtown Manhattan. The stake purchase reportedly valued at $1.4 billion was seen by many observers as signaling the revitalization of the high-end New York property market after the US economic downturn.

Earlier this month, Shanghai-based Greenland Holdings Group agreed to buy a 70 percent interest in an apartment project potentially valued at more than $5 billion in the New York City borough of Brooklyn.

Built in 1961 with banker, philanthropist and Chase Manhattan Bank chairman and CEO David Rockefeller playing a leading role, One Chase Manhattan Plaza is a visible symbol of wealth and power in the Wall Street area. Although owner JP Morgan Chase & Co moved its headquarters to Park Avenue in 1996, its JPMorgan Chase Bank unit has remained a tenant of One Chase Manhattan Plaza. Fosun said that residency will continue.

For Guo, 46, whose net worth of $3.25 billion ranks him 31st on Forbes magazine's China Rich List, the acquisition is in line with his mission to "help Chinese companies evolve into global players of distinction," according to an interview last month.

"Most of the world's best businesses have come to China, and we are on a global stage," he was quoted as saying. "We face global competition, and that's why we need to develop global competitiveness."

Fosun, while publicly listed, is considered China's largest private conglomerate, with about $28 billion in assets. The company, which was set up in 1992 and trades on the Hong Kong stock market, is involved in insurance, industrial operations, investments and asset management. It mainly invests in "sectors that would significantly benefit from China's growth momentum", according to the company website.

For the first six months of the year, Fosun had net profit of 1.69 billion yuan ($274 million) up 9.1 percent from a year earlier.

JPMorgan Chase decided to put One Chase Manhattan Plaza on the auction block after Steve Witkoff made an unsolicited $650 million offer, the New York Times reported. The competing bids for the property were based on converting the office space into condominiums, high-end rental apartments, a luxury hotel or a retail mall, and an office building, the newspaper said.

JPMorgan Chase wants the deal closed by year's end, so that it can focus on its financial and legal woes, according to the Times. In the past month it posted a third-quarter loss of $380 million and agreed to pay $1 billion to settle government probes into last year's trading losses.

The sale also reflects the "struggle" of sustaining office buildings "in the face of the unrelenting demand for residential properties," said one expert quoted in the Times.

michaelbarris@chinadailyusa.com