Content area
Full Text
A Hong Kong company has signed an agreement to buy the prominent but troubled tower at 40 Wall St. from Citicorp. It is the largest speculative investment downtown since the real estate market collapsed.
Kimson Properties Inc., a subsidiary of Hong Kong-based Ocean Voice Industries Ltd., has reportedly agreed to pay Citicorp $5 million for a long-term lease on the 1.1 million-square-foot tower. In addition, Kimson has agreed to spend $20 million to $30 million to renovate the property.
The transaction is a vote of confidence in the downtown market, which is suffering its highest vacancy rate in decades. Kimson has no new tenants in hand for the building, which is only 20 occupied. Rather, the Hong Kong company is reportedly planning to market it to the usual financial district tenants.
The deal is a vivid reminder of how far downtown property values have declined. The property was purchased in 1989 for $77 million by a group including Burton P. Resnick, a prominent developer, and New York's Belfer family. Citicorp has controlled the property since 1991, when that aforementioned group defaulted on a mortgage now valued at $85 million.
The 40 Wall deal is reportedly to close at a foreclosure auction scheduled for May 17. Real estate officials familiar with the property say that it is unlikely that another...