The Sony Tower stands at the corner of Madison Avenue and 56th Street in midtown Manhattan. At 197 metres, it’s a little higher than its neighbours but there are at least 60 taller buildings in New York. Yet when it was completed in 1984, it was considered one of the more controversial buildings in the city.
The reason? The peak of the skyscraper, atop what was once AT&T’s headquarters, is adorned with a broken pediment, the triangular structure commonly supported by columns in classical Greek style. Additionally a circular space was carved out of the apex of the triangle at the top of the tower, leading to its christening as the ‘Chippendale’ building, because it resembled the broken pediments often carved by the 18th-century cabinetmaker into highboys and bookcases (see photo).
Within a decade, the 35-storey building had become a symbol of post-modernist architecture and Japan’s Sony purchased it from AT&T in 1992.
Twenty years on, and the groundbreaking building may be changing hands again. CBN reported last week that Pan Shiyi and Zhang Xin, the couple behind SOHO China, the largest property developer in Beijing, are set to become its new owners. If they do buy the skyscraper, valued at an estimated $1 billion, it looks like becoming the largest deal in the US property market for a while.
The Chinese couple is said to be bidding through an investment vehicle called Capevale, although neither has confirmed the rumours of their interest in the property.
Whether or not the deal goes ahead, it wouldn’t be the first time that SOHO China has invested in New York, having paid $600 million for a 49% stake in Park Avenue Plaza, a 45-storey office tower at 299 Park Avenue, back in 2011.
Nor is SOHO China the only Chinese company shopping for New York real estate. In February, HNA Group spent $130 million on the hotel portion of the Cassa Hotel and Residences on Sixth Avenue between Times Square and Broadway.
SouFun, the operator of a leading real estate website in China, also spent $60 million on a 16-storey building that used to be AIG’s training centre in Lower Manhattan back in 2010. Last October the company spent another $14.7 million to buy the rest of the building. The deal made SouFun the first Chinese firm to own an entire building on Wall Street.
Albeit at smaller price tags, the Chinese purchases recall a similar spree from Japanese investors on marquee American properties in the 1990s, including the Rockefeller Centre in New York and the Pebble Beach golf course in California.
But Chinese individuals are in the market for apartments too.
“Since the latter part of last year the number of overseas investors buying properties in New York has gone up. Some tourists have even made house-hunting part of their itinerary. For them, buying a property on Fifth Avenue is no different from buying a luxury handbag,” Luo Yihui, senior vice president at Prudential Douglas Elliman Real Estate, told CBN.
Perhaps surprisingly, given his reported interest in Sony Tower, SOHO’s Pan has commented that the rental yields on offer in New York trail those of Chinese prime real estate. “New York’s rental rate of return is not high, only about 4%. That’s far less compared with many of SOHO China’s projects in China,” says Pan, adding that four of SOHO China’s projects have rental yields higher than 14%.
So why buy in New York when the returns look higher in China? Nikki Field, one of Sotheby’s property brokers, told the New York Times that her clients from China are often looking for somewhere safe to park their cash. “When I first went over there five years ago, my presentations all had to be about return. Everyone was looking for returns,” Field recalls. “Two years ago, return questions almost dried up. Now it is all about wealth preservation. They are anticipating a bubble in China,” Field added.
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