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New York: A group of invest-ors led by Boston Properties, including Goldman Sachs and two Middle Eastern sovereign wealth funds, are in talks to buy the GM building and four other properties from embattled New York property magnate Harry Macklowe for $3.6-$3.9 billion, according to sources.
Any deal is likely to be closer to the high end of that range, a source said. The 50-storey GM building - which overlooks Central Park in Manhattan and houses a large Apple store marked by a distinctive glass cube - would be sold for about $2.8 billion.
That would be the highest amount ever paid for a single building in the US but would still fall short by 12-15 per cent of the $3 billion-$3.3 billion Macklowe had initially hoped for - but the record pricing could provide relief to the New York real estate industry.
A deal at that value might suggest highly priced acquisitions are still possible in spite of the trouble in the credit markets. Banks' reluctance to lend meant an 82 per cent drop in the volume of commercial property purchases in the first quarter, Cushman & Wakefield estimates.
"A deal would be very good news because it effectively gives us some data [on pricing] and clears some of the logjam," said Colin Thomasson, managing director at property brokers DTZ.
The involvement of the sovereign wealth funds - the Kuwait Investment Authority and the Qatari Investment Authority - also gives the US commercial property industry a boost. The industry has been turning to the Middle East to provide equity for deals as sources of debt financing have dried up.
Macklowe and Goldman Sachs had no comment. Boston Properties and the two funds could not be reached for comment.
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