$1.1B Refi for NYC Tower Said to Be Near

A deal reportedly in the works would allow Fosun to remain sole owner of the 60-story office property in Manhattan's Financial District.
28 Liberty St. Image courtesy of Google Maps

Fosun International is said to be negotiating to take a roughly $1.1 billion mortgage against Manhattan office tower 28 Liberty St., a financing deal that could potentially allow the Chinese investment firm to cash out hundreds of millions of dollars, while remaining sole owner of the property, according to an account by Crain’s New York Business.

The business news outlet cited several sources with knowledge of the prospective deal. One source indicated that Deutsche Bank was in talks to be the lead lender. CBRE sourced and is arranging the financing on behalf of Fosun, according to the report. Deutsche Bank and CBRE declined to comment when contacted by Commercial Property Executive, and Fosun could not be reached for comment.

The prospective loan would be approximately $300 million more than Fosun’s existing mortgage. Deutsche Bank extended an $872 million permanent loan for the Financial District skyscraper in November 2017, Yardi Matrix records show. The Crain’s report indicates that the potential new loan could be split between the bank and other lending institutions, because of its large size.

Last year, Fosun reportedly sought a buyer for a 49 percent stake in property, with an expected valuation of at least $1.6 billion.

Adding value

Fosun scooped up the 60-story tower in 2013, at a time of rapidly growing Chinese outbound investment in global real estate. The Shanghai-based conglomerate bought the asset, then occupied by Chase Manhattan Bank, from JP Morgan Asset Management for $725 million.

Fosun proceeded to reposition the 2.2 million-square-foot property, spending hundreds of millions on upgrades, including the addition of a 200,000-square-foot retail center, Marketplace 28, at the base and a high-end restaurant, Manhatta, on the top floor.

The company leased out more than 1 million square feet of office space to tenants including the Office of the New York State Attorney General, the London Stock Exchange and Booking.com. Global reinsurance company SCOR leased 75,000 square feet in the tower for its new headquarters earlier this year.

Chinese firm bucks trend

Chaired by billionaire Guo Guangchang, Fosun has interests ranging from finance to pharmaceuticals around the world. The sprawling conglomerate owns French resort chain Club Med and Portugal’s largest insurance firm Fidelidade and is in talks to buy out British package-tour business Thomas Cook.

Fosun’s real estate deals include 126 Madison Ave., a 47-story luxury residential project in Midtown Manhattan, which the firm is developing in a partnership with JD Carlisle; as well as the iconic Royal Exchange in the City of London, which its majority-owned Resolution Property purchased last year. Fosun has also acquired a 5.1 percent stake in U.S. senior housing operator Brookdale Senior Living.

The rumored mortgage deal for 28 Liberty St. comes amid a sharp decline in Chinese acquisitions of commercial properties in the U.S. Mainland Chinese investment in the U.S. dipped 32 percent year-over-year in the first half of 2019, according to a new report by Cushman & Wakefield. Globally, mainland investors’ cross-border property deals plunged 66 percent in the same time period, the brokerage found, drawing on data from Real Capital Analytics.