Greenland Holding Group Co., a developer building one of China’s tallest towers, agreed to buy a 70 percent stake in New York’s Atlantic Yards, the 22-acre residential and commercial real estate project in Brooklyn.
Greenland signed a memorandum of understanding with Forest City Ratner Cos. to co-develop the project, including infrastructure and apartment units, the companies said in a joint statement today. The deal excludes the Barclays Center, home of the National Basketball Association’s Brooklyn Nets, and the first housing tower under development.
The transaction is the biggest deal of its kind by a Chinese developer in the U.S., Greenland said in an e-mailed statement. China’s property developers are expanding overseas as the government maintains curbs on housing at home to cool prices. China Vanke Co., the biggest homebuilder listed on the mainland, said in February it joined a residential real estate venture in San Francisco.
“The trend for Chinese developers to continue to invest in the property market abroad will depend on the returns they get in the first batch of such investments,” Frank Chen, Shanghai-based head of China research at property broker CBRE Group Inc., said by phone. “The biggest challenge they face is not knowing the foreign markets well, so it’s wise to work with local partners.”
Greenland will develop the Atlantic Yards project with Forest City Ratner and share in the project costs, according to today’s statement. Forest City Ratner, a unit of Cleveland-based Forest City Enterprises Inc., would manage day-to-day business. Financial terms of the transaction weren’t disclosed.
Forest City Enterprises Chief Executive Officer David LaRue said in a conference call last month that the company was marketing a partnership in the project to capitalize on its investment and accelerate development.
“This partnership will allow us to deliver the 6,400 units of housing, including 2,250 units of affordable housing, to market more expeditiously, which is important for Brooklyn and the entire city,” Bruce Ratner, chairman of Forest City Ratner, said in the statement.
Greenland, a closely held company set up in 1992, said in July that it’s investing $1 billion in a downtown Los Angeles project to acquire a stake from California State Teachers’ Retirement System.
“Greenland holds a positive view on the U.S. market,” Chairman Zhang Yuliang said in the statement today. “The U.S. economy is recovering. There’s ample amount of liquidity in the market.”
— With assistance by Bonnie Cao