A Middle East oil-rich fund is in talks to swallow a 75 percent chunk of the Chrysler Building, but sources say control of iconic buildings isn’t the priority for most sovereign-wealth funds shopping US properties.
As first reported in The Post yesterday, The Abu Dhabi Investment Council plans to spend $800 million on the stake, but would remain a silent partner, leaving Tishman Speyer with its 25 percent stake that controls the building.
Real estate sources say the proposed deal fits a larger pattern of sovereign-wealth funds preferring to make investments with local partners that will still operate the buildings.
And while the Chrysler Building is an icon, buying picture postcard trophies – as the Japanese did with buildings such as Rockefeller Center decades ago – doesn’t top the shopping lists of these funds.
“A lot of the folks that we have met with recently don’t even want to look at iconic real estate,” said Scott Latham, an investment adviser with Cushman & Wakefield. “They want to look at the same deals the locals look at.”
Various Dubai investment firms have been buying city bricks since 2005.
While Istithmar made a splash when it bought the Helmsley Building at 230 Park Ave. for $705 million, that fund, advised by Andrew Farkas of Island Capital, also picked up 280 Park Ave. and nearly bought 5 Times Square from Boston Properties.
With exchange rates favorable and pricing for city assets remaining fairly stable, real estate watchers see more deals on the horizon as the wealth funds of Qatar, Abu Dhabi and even oil-rich Norway have only just begun to redeploy their wealth in America.
Earlier this year, government funds from Abu Dhabi, Kuwait and Saudi Arabia invested around $1 billion with the Related Companies andDubai World poured over $5 billion into MGM Grand’s non-casino ventures.
