One Chase Manhattan Sold to Fosun of China for $725M

Fosun International Limited, China's largest private conglomerate by revenue, has agreed to purchase One Chase Manhattan Plaza from JP Morgan Chase for $725 million, putting down a 10%, nonrefundable deposit on the deal this week. Fosun, the investment arm of China's biggest closely held industrial group, intends to keep the tower as an office building, said Darcy Stacom, vice chairman at CBRE Group Inc., who led the brokerage team that conducted the sale for JPMorgan. Potential buyers had been offered residential conversion as an option, to capitalize on rising Manhattan condominium prices.

"The wave continues with this purchase," said Dan Fasulo, managing director of property-research firm Real Capital Analytics Inc. "We've seen a series of trophy transactions in key cities around the United States done by the Chinese, in New York, San Francisco, Los Angeles, as well as smaller acquisitions in other markets around the country."

Owned by Guo Guangchang, Fosun beat out over half a dozen bidders for the 60-story office tower, which is roughly half occupied by JPMorgan staff that will mostly relocate to other New York locations. Chase moved its headquarters from One Chase Manhattan Plaza to an address near Grand Central Terminal in 1996. Situated in the core area of the north section of downtown Manhattan, the financial district of New York City, the plaza of the building connects with 7 subway lines providing great access to public transportation. A spokeswoman for Fosun said that property will only grow in value, citing its prime location and the renovation of the nearby Fulton Street transportation hub, according to CNN Money.

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Asian Investors Making Moves in US CRE Markets

A new article from the Wall Street Journal titled Asian Investors Dig Into U.S. Property takes a look at the impact foreign investors are having on real estate development in the United States. Equity investments in the U.S. from Singapore, South Korea and China are already at all-time highs this year, for a combined total of $5.2 billion through mid-June, according to data from Real Capital Analytics. An excerpt from the article with investment information follows:

Singapore, the No. 1 Asian investor in U.S. property this year, has invested about $1.9 billion as of mid-June. That is more than the cumulative total that the city-state has invested in the U.S. over the past decade, Real Capital data show.

Singapore's recent deals include the Government of Singapore Investment Corp.'s acquisition of an office building in San Francisco's Financial District. GIC also bought a resort in Maui and four other hotels from hedge-fund manager John Paulson's real-estate fund. In June, Singapore property investor Overseas Union Enterprise completed its purchase of U.S. Bank Tower in Los Angeles, the tallest building in California, for $367.5 million.

China has invested more than $1.5 billion in 2013, compared with $300 million in 2012, according to Real Capital. Last year, the China Insurance Regulatory Commission paved the way for more deals by relaxing the rules for some big insurers to invest in certain types of overseas property.

Meantime, numerous South Korean investors are shopping in the U.S. For example, Mirae Asset Global Investments Co. recently agreed to pay $218 million to acquire an office tower on Chicago's West Wacker Drive.

South Korea pension funds, flush with contributions from an aging population, increasingly have been looking for property outside the domestic market. Representatives of country's National Pension System are making the rounds in New York, looking to invest a mimimum $100 million in office buildings, hotels or shopping malls, commercial real-estate brokers say.

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Blackstone Buys $473M in Shopping Centers

Blackstone Real Estate Partners VII, a Blackstone Group LP fund, entered into an agreement with Equity One, Inc. to purchase 36 shopping centers comprising approximately 3.9 million square feet for $473.1 million according to a Boston Globe article. The assets in the portfolio were encumbered by mortgage loans having an aggregate principal balance of approximately $177.4 million as of June 30, 2011 Equity One said in a statement. Lazard Freres & Co. LLC acted as Equity One's financial advisor in the transaction while Eastdil Secured acted as Blackstone's financial advisor.

"We are very pleased to enter into this transaction with Blackstone," said Jeff Olson, Chief Executive Officer at Equity One. "Together with our $600 million purchase of Capital & Counties and other recent acquisitions, this sale significantly advances our strategic plan to concentrate our portfolio in the urban retail markets of New York, Miami, Boston, San Francisco and Los Angeles."

The shopping centers are predominately located in the Atlanta, Tampa and Orlando markets, with additional properties located in North Carolina, South Carolina, Alabama, Tennessee and Maryland. A Businessweek article notes that retail centers with supermarkets are attracting investors because of the perceived safety of properties that consumers have to visit for necessities even in a slow-growing economy. Sales of U.S. grocery-anchored retail properties in the first half of this year exceeded the total for all of 2010, according to research company Real Capital Analytics Inc.

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Chevron Picks Up Four Allen Center for $340M

Four Allen Center, the former headquarters for Enron in Houston, was purchased by Chevron Corp. for $340 million this week as Brookfield Office Properties unloaded the property from its portfolio. According to the Wall Street Journal, Brookfield bought the property, which sat vacant for three years before Chevron leased the building. for $120 million in 2006 from Towanda Development I Ltd. The building at 1400 Smith Street stands 50 stories tall with 1.3 million square feet of space.

"We have created significant value through the sale of this stabilized asset concurrent with Chevron's sizeable lease extension at our adjacent property," said Dennis Friedrich, president and global chief investment officer of Brookfield. "Chevron represents the type of top-flight corporate tenant we seek to partner with in our global energy-sector markets."

The sale price is a "coup" for Brookfield, said Dan Fasulo, managing director at Real Capital Analytics Inc. in a Bloomberg article. "It's a win-win for both parties," Fasulo said. "For Chevron, obviously they're a cash-rich corporation. They have the money to buy their own property."

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US Commercial Prices Fell 3.3% in August

The latest report from Moody's Investors Services has been released showing that commercial prices in the U.S. dropped 3.3% from July to August of this year, a continued decline in the market that's seen prices down some 45.31% since the peak set in October 2007. Moody's commercial real estate prices are now 19% lower than the consumer price index but analysts expect the index to "revert to a long term trend line close to that of the CPI".

"The commercial real estate market in the US has become trifurcated with prices rising for performing trophy assets located in major markets, falling sharply for distressed assets, and remaining essentially flat for smaller healthy properties," said Nick Levidy, Moody's managing director in a Property Wire article. The Moody's/REAL CPPI report is produced by the MIT/CRE and is a complimentary report to their alternative transaction based index (TBI) as it is published monthly and is formulated from a completely different dataset supplied by Real Capital Analytics, Inc. and Real Estate Analytics LLC.

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