The principals at Kuafu Properties, the Chinese private equity-backed development firm that rapidly became one of Manhattan’s most aggressive property buyers, are going their separate ways, sources told The Real Deal.
Zengliang “Denis” Shan, the former architect who was the conduit to the Chinese capital that bankrolled the company’s $750 million-plus buying spree, is leaving Kuafu to start his own venture. Shan’s new company will include the $300 million development site at the former Subway Inn assemblage across the street from Bloomingdale’s on the Upper East Side.
Kuafu bought the site at 143-161 East 60th Street last October for more than $1,000 per square foot, with plans to build a 1,240-foot supertall condo tower. As the high-end condo market has suffered from a glut of oversupply, however, the developer said earlier this year the plan is to sit on the project and wait for the next real estate cycle.
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Shang Dai, who started his career in the U.S. as an attorney doing real estate deals in Flushing, will stay on to lead Kuafu, which will retain the remaining $456 million worth of development sites the company bought.
In a statement to TRD, representatives for Kuafu said the split was amicable and the plan ““all along was for Shang and Denis to work together to start a U.S. real estate firm, with Denis ultimately spinning off to form his own platform.”
“Kuafu had the good fortune to grow very quickly, especially in the past year,” the company added. “With Kuafu firmly established and having several projects underway, Denis is able to form a new entity, which will develop the 60th Street project. It is a project he finds very exciting and deserving of his undivided attention, for the foreseeable future.”
The two principals remain friends and their companies are “forces to be reckoned with in the New York real estate market” and plan to work together in the future, Kuafu said.
As the cash-flush firm jumped onto the scene in late 2013, it staffed its Times Square office with a team of employees poached from around the industry.
They include head of development Jeffrey Dvorett, formerly of Extell Development, chief investment officer Stephen Muller, formerly an investment banker at Greenwich Group International, and head of acquisitions Christopher Sameth, formerly a principal at Investcorp.
It’s not clear which executives will break off with Shan.
Kuafu’s development pipeline includes the condo-conversion of the top 13 floors of 1 MiMA Tower at 460 West 42nd Street, which has a planned sellout of $414 million, as well as an assemblage at 86th Street and Lexington Avenue that the developer acquired in partnership with Ceruzzi Properties and Stillman Development for $134 million.
The partners filed plans to build an 18-story, 63-unit condo building at 147 East 86th Street, with pricing around $3,000 per square foot.