The 60-story building in Lower Manhattan known as One Chase Manhattan Plaza has been sold by JPMorgan Chase to a Shanghai-based conglomerate for $725 million. The buyer has not indicated whether the building, considered a landmark and an important party of New York City's financial district, will be converted into apartments or continue to be a commercial property. The bank has been under investigation by federal regulators stemming from irregularities in its mortgage-backed securities business that affected investors in Michigan and elsewhere.
This is the latest acquisition of New York real property by Chinese-owned companies. It follows on the heels of Shanghai-based Greenland Group becoming a 70 percent share holder in a venture that is developing a 22-acre commercial and residential development in downtown Brooklyn known as Atlantic Yards. The area is near commuter rail and is already home to the Barclays Center, which is the arena where NBA's Brooklyn Nets play and which will also be home to the NHL's New York Islanders beginning in 2015. The General Motors building in Manhattan is also 40 percent owned by a Chinese property developer.
The sale of the office building may be coming at a good time for JPMorgan Chase. The settlement of the securities investigation could cost it up to $11 billion, including $7 billion in penalties and $4 billion in consumer relief. The bank also recently announced that it would pay $100 million to U.S. regulators for trading-related activities that generated approximately $6 billion in losses.
Large real property acquisitions can be complicated. Investment groups that are considering such purchases may wish to have a real estate attorney review the terms of the transaction.
Source: CNN, "JPMorgan sells New York building to Chinese firm for $725 million", Charles Riley, October 18, 2013