New York real estate prices are still rising in spite of the overall slowdown in the U.S. economy. While bankers wrestle with tightening their loan policies, sovereign wealth funds are quietly buying up prime commercial real estate locations. A few months ago, the trophy GM building witnessed its sale at $2.8 billion to the Kuwait Investment Authority and the Qatar Investment Authority, the highest price ever paid for a U.S. office building. Now comes the pending sale of the Chrysler Building, a landmark art nouveau building built in 1930 in midtown Manhattan, almost adjacent to Grand Central Station. And who is the buyer? The Abu Dhabi sovereign wealth fund, which is ponying up $800 million - more than a 100 percent return for the lucky seller, Prudential. Clearly, the weak dollar is helping these smart investors take advantage of real estate opportunities. A note of caution though: Have we forgotten the Japanese coming to Manhattan in the 1980s, buying up buildings on Fifth Avenue from 40th Street to 60th Street - including much of the prime commercial structures near Rockefeller Center for record prices? Then a few years later, the Manhattan real estate bubble burst and U.S. investors swooped in with bargain basement offers to enable the Japanese to unload what had been a bad investment after all. (rm)
