Hines, the famous commercial property developer, is reportedly in talks with a group of Asian banks and a Singaporean real estate firm to develop a luxury high-rise project in central Manhattan, New York, according to the Wall Street Journal.
The Singaporean property firm, The Kwee Family, is planning to team up with several Asian banks to invest in the property. Plans for constructing the building were shelved in 2007 when the property market crashed. However, considering the market's steady rebound, restarting the project doesn't come as a surprise.
The luxury project is slated to come up on a lot just next to the Modern Museum of Art in Manhattan. Hines purchased the lot for $125 million in 2007 and roped in Pritzker winning architect, Jean Nouvel, to design the tower. The building was then planned to span a height of 1250 feet and was expected to be a mixed-use tower. While the market crash affected the project, the New York City Planning Commission also limited the plan. The commission asked the developers to reduce the height of the tower by 200 feet. Even though Nouvel designed a shorter tower and won city approval, the construction remained stalled due to the large construction cost.
Talks of reviving the project started sometime in 2012. The consortium is now hoping to pool in $300 to $800 million for the construction alone. However, he talks are still private and not much detail about the project has been made public.
Meanwhile, Asian investment in the U.S. real estate sector has been increasing. Wealthy businessmen from countries like China, Singapore and South Korea have been pouring in a lot of money on potential investments. Recently, Overseas Union Enterprise, a Singapore-based property firm, purchased the famed US Bank Tower in Chicago for $367.5 million. The company had announced the acquisition in March and completed the sale in June.
The commercial property market of Manhattan is regaining its lost luster. The Office Price Index in the region was just 20 percent short of the record highs documented in 2007, just before the market crashed. But that does not mean a collapse is near. Experts believe that the sector still has a long way to go before the bubble bursts. For now, New York is one of the most lucrative investment options when it comes to real estate.
"It's pretty clear to us that New York is one of the safest havens for investment around the world around today,The theory goes that rental growth in hard assets of this quality will be a safe place to protect," Haim Chera, principal of Crown Acquisitions, said to Reuters.