Rockefeller Center Owner Tishman Wants More Deals With VankeBloomberg News
Tishman Speyer Properties LP, the owner of New York’s Rockefeller Center, wants more deals with China Vanke Co. after partnering with the nation’s biggest developer on its first foray into the U.S. real estate market.
The companies are planning two residential towers in San Francisco that will cost $620 million and have 655 units, making it one of the largest condominium projects in the city, according to Rob Speyer, Tishman’s president and co-chief executive officer. Vanke will invest $175 million, Tishman will put in $75 million and $370 million will be financed by bank loans, said Speyer.
The cross-border tieup comes as Chinese developers like Vanke venture abroad to diversify their portfolios amid tighter government control of property markets, while U.S. builders are eyeing opportunities in the world’s second-largest economy. Tishman also plans to expand in China’s commercial and housing sectors, beyond the four cities it’s already in, Speyer said.
“We are very excited for this first project, and I would hope it will lead to other projects with Vanke over time,” Speyer said in a telephone interview on Feb. 20 from New York. “Real estate is not immune to globalization, and there are opportunities for all of us to benefit from the industry whether it’d be in China or U.S.”
The San Francisco project at 201 Folsom St. will feature connected high-rises of 37 and 42 stories. The project, across the street from Tishman’s already completed The Infinity condo towers, is expected to be ready for occupancy by the end of 2016, Speyer said.
The site is located in San Francisco’s South of Market district, the most desired office sub-market for technology companies, including Yelp Inc., Salesforce.com Inc. and Google Inc.
Vanke signed the deal on Feb. 12, Chairman Wang Shi wrote on his microblog on Sina Corp.’s Twitter-like Weibo service, which was confirmed by Vanke, based in the southern Chinese city of Shenzhen.
“It was a process over a couple of years getting to know each other,” Speyer said. “When we decided to bring in a partner for our new San Francisco project, given their interest in launching a U.S. business, it was a natural fit.”
San Francisco housing values have been surging, buoyed by three years of growth in the technology industry. The median price of a home sold in San Francisco county jumped 16 percent last month from a year earlier to $699,000, according to research firm DataQuick.
Vanke set up international units to expand overseas after it acquired Hong Kong developer Winsor Properties Holdings Ltd. in May. The developer plans to shift trading of its foreign-currency shares from Shenzhen to Hong Kong to access a bigger pool of global investors.
Shares of Vanke have surged 38 percent in the past year and were unchanged in Shenzhen trading today at 11.31 yuan.
Among other Chinese developers expanding overseas, Xinyuan Real Estate Co. in September took control of a lot slated for more than 200 units of housing near New York’s Brooklyn waterfront for $54.2 million. The deal was the first of its kind by a Chinese firm in the U.S., the Beijing-based company said.
Closely held Tishman, based in New York, last year raised 1.2 billion yuan ($192 million) from Chinese investors for a real estate fund that will develop a two-tower, mixed-use project in the country’s eastern city of Suzhou. It also has developments in Shanghai, in the western city of Chengdu and in Tianjin in the country’s north.
The Beijing central government this week told local authorities to “decisively” curb real estate speculation and take steps to rein in the property market after prices rose the most in two years last month, according to a statement Feb. 20 after a State Council meeting headed by Premier Wen Jiabao.