Two Manhattan Buildings Attract Big Prices

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Investment funds have bought stakes in two Manhattan office towers in separate transactions, as investors target the city's rising prime property values and increasing rents. 

Chinese property developer Zhang Xin, founder of Soho China, joined M Safra and Co Inc, the investment firm controlled by Brazil's Safra family, to purchase a 40 percent stake in the General Motors Building for $1 billion, creating a $3.4 billion value for the tower, according to Reuters.

As prices for Manhattan office buildings continue to recover, this deal would make the 50-story building with views of Central Park the most expensive office building in the U.S., Reuters reports.  

The stake was sold by Goldman Sachs Group's U.S. Real Estate Opportunities Fund and Dubai-based Meraas Capital, a private equity firm. 

The General Motors building includes 150,000 square feet of prime retail space, and the list of tenants includes cosmetics maker Estée Lauder, Icahn Enterprises, and the law firm Weil, Gotshal and Manges, reports the Financial Times.

In another record purchase, The Carlyle Group has agreed to sell its 27-story, 600,472-square-foot, office and retail building at 650 Madison Avenue for $1.3 billion to retail developer Crown Acquisitions and investment firm Highgate Holdings, according to a company release. 

"It's pretty clear to us that New York is one of the safest havens for investment around the world around today," Haim Chera, principal of Crown, told Reuters. "The theory goes that rental growth in hard assets of this quality will be a safe place to protect."

Carlyle bought the building for $680 million in 2008 to later refurbish and lease the property. After the sale completes, this would be the biggest sale of a single building in the U.S. since Google purchased the tower at 111 Eighth Avenue for $1.8 billion in 2010, according to the FT.  

Manhattan office buildings have mostly recovered from the financial crisis, with several recent sales of prime buildings.  

Office buildings in the New York Metro Area reported a 25 percent year-over-year increase in prices in April, according to Reuters.