Chinese firm reportedly in talks to buy NJ site
Updated: 2013-10-16 00:00
By MICHAEL BARRIS in New York (China Daily)
A Chinese construction company is in talks to acquire a prime New Jersey development property that could support a 1,000-unit apartment complex, according to a published report.
China Construction America Inc, the US unit of China State Construction Engineering Corp, has a tentative deal to purchase the site in Jersey City overlooking the Hudson River and the Manhattan skyline for $68 million, the Wall Street Journal reported on Friday, citing multiple executives with knowledge of the sale.
An employee in the president's office at China Construction America told China Daily, "We have no comment to this. We will be able to talk at a later time. This is a corporate decision."
Jersey City Press Secretary Jennifer Morrill also declined to comment, saying, "This is something you would need to speak with China Construction America Inc about."
The reported discussions underscore the continuing magnetic pull of US real estate projects on Chinese developers and investors.
Since entering the US market 1985, China Construction America has won contracts for various infrastructure projects, including a commuter train station at Yankee Stadium in New York, and the Skyway Bridge in New Jersey. Its parent, China State Construction Engineering, is China's biggest construction company by revenue and the world's third largest.
The seller of the Jersey City site reportedly is Hartz Mountain Industries Inc, which bought the site for $35 million 2011 and was planning a 1,000-unit apartment development. The site originally was targeted for office space by financial giant Merrill Lynch & Co, which bought the land in 1999. Secaucus, NJ-based Hartz Mountain acquired the land from Bank of America Corp in 2011.
Hartz Mountain has apparently shifted its focus to New York, where land values are rapidly rising, the Journal said.
A Jersey City official was quoted by the Journal as saying he believes that China Construction will continue with plans to build an apartment complex on the site if it closes on the deal because the city has a tight rental apartment market.
The area's vacancy rate was 3.5 percent in the third quarter, down 0.3 percentage points from the third quarter of 2012, below the national 4.2 percent rate, according to Reis Inc, a real-estate research firm. The average rent was $1,558 in the quarter, well above the national $1,073 average.
In June, a group led by one of the world's richest women, Chinese real-estate tycoon Zhang Xin, paid a reported $1.4 billion for a 40 percent stake in the most expensive US building on the market – the General Motors office tower in Manhattan. Also, China Vanke, the country's largest residential developer, joined forces with Tishman Speyer Properties Inc in a plan to build two condominium towers in San Francisco.
"China has always had the potential to be a major source of capital for real estate globally, and in the last few years we have really seen this market gather pace," Arthur de Haast, head of the international capital group at property-services firm Jones Lang LaSalle, said at the time.
More than a month before Zhang's group completed its purchase of the minority stake in the GM building, executives with Chicago-based Jones Lang LaSalle had forecast that globally Chinese real-estate investment this year could reach $5 billion. The projected total would represent a 20 percent jump from 2012.
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