New York plans for $1bn tallest residential tower

Gehry tower

A Los Angeles real-estate company has unveiled plans to build New York’s tallest residential building, the $1bn 432 Park Avenue tower.

According to a report carried by the Wall Street Journal, the CIM Group last year bought the Park Avenue development site in Midtown Manhattan for $305 million, well below the land’s value during the boom years. Developers have considered it one of the most attractive sites in the world because of its location at the heart of New York City.

At 400m, the tower will be taller than the current tallest residential building in New York, the Eight Spruce Street building designed by architect Frank Gehry (pictured). It will also stand taller than the Empire State Building office tower, and will only be topped by the World Trade Centre development in lower Manhattan.

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The firm and its partner, New York developer Harry Macklowe, have been quiet about their intentions. But plans show a condo and retail complex designed by Uruguayan-bron architect Rafael Vinoly, best known in New York for his work on the Jazz at Lincoln Centre inside Time Warner Centre.

The WSJ reports that there has been no completion date announced. CIM needs to finance a $700m loan to construct the project which, given the state of the economy in the US and Europe, isn’t easy to obtain.

The report said that CIM operates like a private-equity firm in that it mostly invests through funds it raises from institutional investors. The firm currently has $9.5 billion under management. Its largest single investor is Calpers, the giant California pension fund, which has about $1.7 billion invested with the firm.

Over the past five years, CIM’s Urban Real Estate Fund has an annual return of 7.4%, compared with a 20% annual decline for the universe of 19 high-risk, high-return funds that invest in urban property, tracked by Calpers.

The firm’s acquisition of the Park Avenue site kicked off a CIM cross-country shopping spree of apartment buildings in Dallas, a South Beach hotel, a loan backed by the Trump SoHo Hotel and a stake in the Art Deco office building that is home to Credit Suisse Group AG. The firm’s total investment since the end of 2009 has been about $1.7 billion.

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