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China Investor Said in Talks for Stake in NYC GM Building

A Chinese investor is in talks to buy a 40 percent stake in Manhattan’s General Motors Building, a 50-story tower near the southeast corner of Central Park.

The prospective buyer is the family of Zhang Xin, chief executive officer of office landlord Soho China Ltd. (410), according to a person with knowledge of the negotiations who asked not to be named because the talks are private.

The sellers are a Goldman Sachs Group Inc. (GS) fund that invests on behalf of the sovereign wealth funds of Kuwait and Qatar, and Meraas Capital LLC, a Dubai-based private-equity firm, the person said. If completed, the deal would value the tower at about $3.4 billion, according to the Wall Street Journal, which reported the talks earlier today.

Boston Properties Inc. (BXP), the biggest U.S. office real estate investment trust, owns the other 60 percent of the tower. The Boston-based company led the investment group that paid $2.8 billion for the property in 2008, according to data from research firm Real Capital Analytics Inc.

“If we have the opportunity to work with a new partner, we’re happy to do that,” Boston Properties President Douglas Linde said Jan. 30 on the REIT’s earnings conference call. He said the company was content with its stake.

“We, as a 60 percent owner and with significant opportunities on the control side, feel really good about how we can operate the buildings and what we can do with regards to repositioning and re-tenanting and putting capital into the buildings,” Linde said.

Michael DuVally, a Goldman Sachs spokesman, declined to comment on the talks. E-mails to Zhang and Meraas sent outside of regular business hours weren’t immediately returned.

The marble-faced tower, on Fifth Avenue at 59th Street, is across from the Plaza Hotel. The Boston Properties-led group bought the building from New York developer Harry Macklowe, who won a bid for it in 2003. He was forced to sell it five years later to help pay $7 billion in debt he had defaulted on after borrowing to purchase seven other Manhattan skyscrapers.

To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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