Paulson Adds to Puerto Rico Real Estate With AIG BuildingKelly Bit
Paulson & Co., the $23 billion firm run by John Paulson, acquired an office building in San Juan, Puerto Rico, from American International Group Inc. as the billionaire hedge-fund manager increases his investments in the commonwealth.
Paulson & Co. bought American International Plaza, a 326,000 square-foot (30,286 square-meter) office building built in 1991 that is located in the Hato Rey financial district, the New York-based firm said in an e-mailed statement. The terms weren’t disclosed.
“We remain optimistic about the future of the San Juan real estate market including the office, residential and hotel sectors,” Michael Barr, senior real estate partner at Paulson & Co., said in the statement.
Paulson, who last year considered relocating to Puerto Rico to take advantage of new tax laws, has said the economy is at the beginning of a turnaround and in April predicted the island will become the Singapore of the Caribbean. The 58-year-old billionaire said opportunities to buy real estate in the region won’t last much longer and that he’s looking to purchase sites that can be developed to serve people he expects to move there because of the legislation.
Paulson & Co.’s real estate acquisitions in Puerto Rico include the St. Regis Bahia Beach Resort, the Condado Vanderbilt, La Concha Renaissance Hotel and Tower, and various land parcels for future development, according to the statement.
Its latest investment comes as the commonwealth and its agencies wrestle with a $73 billion debt load and an economy that’s shrunk in five of the past seven fiscal years. The three biggest ratings companies cut the island’s credit ranking to junk earlier this year. Island officials have said Paulson plans to invest $1 billion in Puerto Rican projects over the next two years.
AIG, which employs about half as many people as it did at the end of 2008, has been consolidating its real estate footprint. The insurer moved its headquarters to 175 Water St. in lower Manhattan, from a property it was leasing nearby on Maiden Lane, as part of a plan announced last year.
Real estate sales helped the insurer raise funds to repay its bailout, which began in 2008 and swelled to $182.3 billion. Other buildings AIG has sold include its Japan headquarters and a New York tower.