Bank of China Ramps Up Presence in N.Y. Real Estate

Bank of China Ltd. is lending more than $250 million to refinance an office tower near Columbus Circle in Manhattan, according to people familiar with the matter, in the latest sign that cash-rich Chinese investors are funneling money into prime New York property.

The five-year loan on the newly remodeled office building, called 3 Columbus Circle, is a boost for a partnership between SL Green Realty Corp. and developer Joseph Moinian that owns the 26-story building. They made headlines recently when SL Green, New York's largest office building owner, rode in to save Mr. Moinian from losing 3 Columbus to another landlord, Related Co.'s Stephen Ross.

The refinancing also is another big commercial real-estate loan made by Bank of China's New York branch, which has been aggressively pushing into New York and other U.S. markets in recent months. The loans underscore a broader overseas push by Chinese banks, which are being encouraged by Beijing to expand abroad to help diversify the country's enormous foreign-exchange reserves.

Bank of China underwrote the new loan on 3 Columbus Circle based on an estimated value of more than $500 million of the 700,000-square-foot property, the people with knowledge of the deal said. There is some risk associated with the 3 Columbus deal because the property is less than 30%-leased. But the loan is expected to include certain reserves and guarantees put up by the SL Green-led joint venture to make up for this, the people said.

The five-year loan will replace the $250 million 'bridge,' or short-term, mortgage held by Deutsche Bank AG and SL Green that is coming due, the people said.

Raymond Qiao, first vice president at Bank of China's New York branch, declined to comment, as did a spokesman for Mr. Moinian.

The loan represents the latest chapter in the saga 3 Columbus Circle, formerly 1775 Broadway. Mr. Moinian, an Iranian immigrant who was very active in the boom years, spent about $100 million to upgrade it, including a new glass skin for the building.

Last summer, Mr. Ross, made a grab for the building by purchasing the $250 million debt on the property. Mr. Ross's plan was to foreclose on and demolish the office project and redevelop the property with luxury condominiums and Nordstrom as its anchor tenant.

But Mr. Moinian blocked that in January by buying the mortgage back with help from another major New York City owner, SL Green.

With job growth stronger in Manhattan than in other parts of the country, the vacancy rate in Midtown dropped to 8% in the first quarter of 2011 its lowest level since the fourth quarter of 2008, according to Cushman & Wakefield.

Foreign investors have long coveted New York property, some with more success than others. Japanese investors, for example, stumbled badly in the 1990s with their purchase of Rockefeller Center and their development of Americas Tower on Sixth Avenue.

Chinese banks so far appear to be relatively conservative in their approach to real-estate investment. Lenders have tried to limit their risks by financing buildings with stable existing cash flows and lending to developers and investors with a solid track record. They generally are offering to lend no more than 65% of a property's value. During the property frenzy, U.S. banks had lent more than 80% of a building's value.

Late last year, Bank of China made an $800 million loan to Brookfield Office Properties to refinance the office building at 245 Park Ave., near Grand Central Terminal. That loan was the biggest on a single building provided by a single lender during the economic downturn.

In June, Industrial & Commercial Bank of China, that country's largest bank by assets, closed its first commercial-property loan in the U.S. by lending $150 million to help refinance a 27-story office-and-retail tower in midtown Manhattan, called 650 Madison Avenue. The ICBC financing was part of a $355 million loan led by Wells Fargo & Co. to a partnership led by private-equity firm Carlyle Group.

Bank of China and ICBC, which are both 70%-owned by the Chinese government, have been betting that property values in the U.S. have fallen enough that their lending risks will be limited. They are particularly fond of the New York market because of the relatively healthy demand for office space in times both good and bad.

Ullens Collection Sets a Chinese Art Auction Record

A triptych by living Chinese artist Zhang Xiaogang sold for 79 million Hong Kong dollars (US$10 million) on Sunday in Hong Kong, setting a new world record for contemporary Chinese art sold at auction.

The work, 'Forever Lasting Love,' sold for more than double its high estimate. It was one of several other record-breaking sales in the highly anticipated auction of a large, unrivaled collection of early Chinese contemporary art owned by Belgian Guy Ullens. Despite some early intrigue surrounding the sale, the Ullens collection fetched HK$427 million â ' more than four times its presale estimate.

Mr. Ullens was one of the first to collect Chinese contemporary art. He began building his private collection in the 1980s, and his collection includes early pivotal works from the art movement's biggest names.

Sotheby's, the house behind the auction, sold all 106 lots that made up about 10% of Mr. Ullens's Chinese art holdings. Evelyn Lin, Sotheby's head of contemporary Asian art, calls the collection a 'visualization of the Chinese nation's history' and says that it is museum-worthy in its quality and breadth.

In a packed room on Sunday, bidding battles between buyers in the room and on the phones upped the prices for artworks from blue-chip Chinese artists such as Zhang Peili and Wang Guangyi.

But works by Zhang Xiaogang were the stars of the sale.

Japan is "strong dog", the tsunami was rescued after drifting for 3 weeks

It appears almost too good to be true, but this little dog has been found alive and well adrift at sea, an astonishing three weeks after the tsunami that devastated Japan.

Members of the Japan Coast Guard came across the dog on Friday as they were conducting an aerial search of the area.

Against all the odds, the dog appears to have survived by living in a partially submerged house that had been swept out to sea.

Rescuers had hoped to find more tsunami survivors living inside the house but after tearing the roof open, it was found to be empty apart from the dog.

Despite its three weeks at sea, the medium-sized brown dog seemed to be in reasonably good condition considering its ordeal.

The discovery of the dog is a rare glimmer of hope in Japan where thousands of people are believed to have perished in the disaster.