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General Motors skyscraper could fetch US$3 billion

A prestigious Fifth Avenue skyscraper is up for sale and could fetch US$3 billion or more, which would be a record price for a US office building.

The General Motors building, a 50-story tower built in 1968 at the southeast corner of Central Park across from the Plaza Hotel, occupies a full city block and is best known as the home of two retail tourist attractions, the FAO Schwarz toy emporium and Apple's glass cube store.

General Motors Corp sold the building in 1991 and the automaker now occupies only a few floors.

NEW RECORD

Real estate industry experts said its sale price would easily exceed the previous record of US$1.8 billion, which was set in 2006 by a 41-story building six blocks further south on Fifth Avenue.

One of the potential buyers for the tower is real-estate investor Joseph Cayre, who told the Wall Street Journal in an interview that he, along with unidentified partners in the Middle East, had put in a bid of at least US$3 billion.

A source familiar with the bidding process said real estate investor Larry Silverstein, the developer of the World Trade Center, had also offered at least US$3 billion.

The source spoke on condition of anonymity because the negotiations were ongoing.

A spokesman for the tower's owner, Harry Macklowe, declined to comment on Wednesday.

Macklowe bought the building from the insurance firm Conseco for US$1.4 billion in 2003.

PROBLEMS

His organization began soliciting offers after running into a multibillion dollar credit problem associated with the recent purchase of several other expensive Manhattan buildings.

The offers for the GM building demonstrate continued optimism about Manhattan's real estate market, which continues to sizzle.

"You need to separate New York City from the national trend," said Andy Simon, senior managing director of the New York office of the real estate services firm NAI Global.

FUNDAMENTALS

With vacancy rates low, rents going up and relatively little new office space under construction in the metropolis, "the underlying fundamentals in New York for commercial real estate remain very strong," Simon said.

The weak US dollar would also allow foreign investors to buy the skyscraper at something of a discount, Simon said.
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