News

New York developer asks China for $1bn

26 June 2013

A New York developer has asked a Chinese bank for about $1bn to build a residential tower set to be taller than the Empire State Building.

Gary Barnett is founder of Extell Development, a company which is constructing one of the most expensive real-estate towers in history, with some apartments in contract to sell for over $90m each, reports the Wall Street Journal.

Barnett has asked state-owned Export-Import Bank of China for a $1bn loan to build a new skyscraper next to Manhattan’s Central Park, according to sources familiar with the deal.

He is also reported to be in talks with a Chinese contractor about building it.

If completed, this deal would be the largest loan for a US residential construction project since the property downturn.

The Export-Import Bank encourages overseas investment so it typically offers relatively low-cost financing for projects involving Chinese contractors or investors.

Generally, “the Chinese bank will provide the financing on very favorable terms,” said Joel Rothstein, an attorney at Paul Hastings LLP who has worked on similar deals.

“At the same time, 'China Inc.' is supported and promoted, as Chinese contractors and construction-material suppliers win high-profile international assignments,” he explained.

Extell Development is currently in talks with the US subsidiary of China State Construction Engineering Corporation (CSCEC) to be the co-general-contractor on the New York tower.

Source: Wall Street Journal