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Shanghai Municipal Investment Group isn't concerned about its local real estate projects, ones that might keep other developers lying awake at night.
The firm has an ownership stake in Central Park Tower, a 1,550-foot-tall condominium that's just about to top out on West 57th Street, and it recently finished building a luxury apartment tower at 138 E. 50th St., where it has yet to sell a single unit.
"I don't worry about it," said Edward Martin, vice chairman of the $75 billion Chinese government–owned fund's U.S. arm, referring to the moribund market for upper-tier apartments. "We have the right team. I think we're going to have success."
Martin didn't have the same optimism about recouping the millions of dollars his firm invested in another recent deal where the die has already been cast. SMI and a partner sold a majority interest in July in a condo development site at 520 Fifth Ave., taking a roughly $65 million loss on the $270 million the pair paid for the property four years ago, according to city records—a heavy loss that is a foreboding sign of potentially more write-offs to come.
"I don't want to talk about that," Martin said, cutting the conversation short.
But SMI is far from alone. Lately a growing list of foreign investors who have collectively poured billions of dollars into major New York City real estate purchases in recent years have found themselves in a similar financial predicament. Several made ill-timed bets on the city's condo market—a sector that has swamped investors at home and abroad. Foreign firms, however, have appeared to take some of the steepest losses.
Two foreclosure proceedings recently were begun at 125 Greenwich St., an 88-story apartment tower in Lower Manhattan that is being built by a partnership involving Italian firm Bizzi & Partners Development, Chinese investment company Cindat Capital Management and domestic concerns including real estate executive Howard Lorber of New York.
Anbang Insurance, a Beijing-based firm that was seized last year by Chinese authorities amid financial turmoil and fraud allegations, is converting the Waldorf Astoria hotel, which it purchased in 2014 for a record $1.95 billion, into condo apartments. Many real estate executives doubt the project will turn a profit.
Sales were so poor at the recently...