The Real Deal New York

As Europe stops lending, China picks up NYC commercial mortgage slack

March 08, 2012 09:30AM

With the European debt crisis stifling the continent’s activity in New York City real estate, China has stepped up to fill its shoes. Citing Trepp data, Bloomberg News reported that Bank of China has quintupled its lending for U.S. properties since 2008 to $2.6 billion. And six of the eight U.S. property loans the bank issued last year were for in New York City. It lent $260 million to 3 Columbus Circle, and $175 million last month to refinance the Mandarin Oriental hotel in Columbus Circle.

Further, Singapore’s United Overseas Bank , which lent capital for SL Green’s acquisition of 724 Fifth Avenue, increased its commercial lending by 178 percent over the past two years to $1.1 billion and Hong Kong-based Bank of East Asia increased its lending 87 percent over two years to $1.1 billion.

With $18 billion worth of New York commercial property bonds maturing in the next two years, China’s capital is sorely needed — especially as Europe’s lending wanes. Anglo Irish Bank has pulled out of the market, Commerzbank real estate unit Eurohypo has placed an embargo on new business, and Societe Generale’s U.S. commercial mortgage book has declined 89 percent in the past two years. [Bloomberg]