Subject: Fwd: Pier 4 Boston/ Chinese Investment
From: "James Bulger" <[email-masked]>
To: "Devon Archer" <[email-masked]>, "Hunter Biden" <[email-masked]>
Date: Wed, 8 Apr 2015 09:43:09 -0400

FYI

---------- Forwarded message ----------
From: *Eileen Kerwin* <[email-masked]>
Date: Tuesday, April 7, 2015
Subject: Pier 4 Boston/ Chinese Investment
To: James Bulger <[email-masked]>, James <[email-masked]>

Boston Project Draws Chinese Insurance Firms’ First U.S. InvestmentsTishman
Speyer will join in $500 million Pier 4 redevelopment
[image: A rendering of the Pier 4 development in the Seaport District of
Boston.]ENLARGE
A rendering of the Pier 4 development in the Seaport District of Boston.
ILLUSTRATION: TISHMAN SPEYER PROPERTIES
By
PETER GRANT And

ESTHER FUNG
April 7, 2015 4:07 p.m. ET
0 COMMENTS
<http://www.wsj.com/articles/boston-project-draws-chinese-insurance-firms-first-u-s-investments-1428437262#livefyre-comment>

China’s two largest insurance companies are making their first investment
in U.S. commercial real estate, buying a majority stake in a $500 million
project in Boston, according to a person briefed on the transaction.

The investment by China Life Insurance Group Co. and Ping An Insurance
<http://quotes.wsj.com/HK/XHKG/2318> Co., along with New York developer
Tishman Speyer Properties, marks the latest sign that Chinese insurance
companies are becoming a force in global real-estate investment.

The Boston development includes a 13-story office building and a nine-story
condominium tower with 100 units. The project in the city’s popular Seaport
District will take up most of Pier 4, which was known for Anthony’s Pier 4,
a popular restaurant that was closed two years ago as plans for
redeveloping the site progressed.

Rob Speyer <http://topics.wsj.com/person/S/Rob-Speyer/5907>, co-chief
executive of Tishman Speyer, confirmed China Life and Ping An’s
participation in the deal, but declined to disclose the size of their
stakes. A person briefed on the deal said each insurer was taking a
one-third stake, while the other third would be owned by a Tishman Speyer
fund that will be the managing partner of the venture. China Life and Ping
An didn’t respond to requests for comment.

Until 2012, the Chinese government prohibited China’s insurance companies
from buying foreign property. Now they are joining other Chinese investors
in becoming increasingly active in U.S. and European markets. Both China
Life and Ping An have acquired property in London, but they haven’t bought
in the U.S. before.
ENLARGE

So far in 2015, Chinese insurance companies have purchased $2.5 billion in
foreign property, more than they have purchased in all previous years
combined, according to Real Capital Analytics. Overall, Chinese investors
in 2014 bought $13.6 billion in foreign real estate, down slightly from
$15.3 billion in 2013 but still well above the $5.4 billion they bought in
2012, Real Capital said.

Beijing has been encouraging Chinese companies to venture abroad and has
loosened foreign-exchange controls and administrative procedures in recent
years. The government in 2012 capped insurers’ real-estate assets at 15% of
their total assets. In 2014, the insurance companies’ regulator, the China
Insurance Regulatory Commission, increased that threshold to 30%. The moves
allowed insurers to invest in mature commercial and office building
properties in prime locations abroad.
Advertisement

The companies have enormous buying power. China Life Insurance Co. is the
country’s largest insurer by premiums, while Ping An Insurance Group ranks
second. Overall, Chinese insurers’ total assets reached 10.55 trillion yuan
($1.7 trillion) as of the end of February, up 70% from the same month three
years ago.

For Tishman Speyer, the Boston transaction shows that its China strategy is
paying off. The firm entered the China market as a developer there, but
lately also has been using the contacts it has made to partner with Chinese
investors in U.S. deals. Tishman Speyer in 2012 sold a building it
developed in Chengdu to Ping An for an undisclosed amount.

“We’ve made relationships in China both with investors and with tenants
that have paid dividends in other parts of the world,” Mr. Speyer said.

Tishman Speyer, one of the top developers in the U.S., owns about 3 million
square feet of office space in Boston’s financial district. Run by Mr.
Speyer and his father, Jerry Speyer, Tishman’s signature assets include
Rockefeller Center and the Chrysler Building in New York, São Paulo’s Torre
Norte and OpernTurm in Frankfurt.

The Pier 4 project in Boston is its first development in the Seaport area.
The firm acquired the site last year and is planning to complete the office
portion of the project in the second half of 2017 and the condo tower in
the first quarter of 2018.
[image: The redevelopment of Pier 4 in the Seaport District of Boston,
presented in a rendering, will be led by two Chinese insurance companies
and U.S. firm Tishman Speyer.]ENLARGE
The redevelopment of Pier 4 in the Seaport District of Boston, presented in
a rendering, will be led by two Chinese insurance companies and U.S. firm
Tishman Speyer. ILLUSTRATION: TISHMAN SPEYER PROPERTIES

Boston’s Seaport district was long a dream of city planners who recognized
the development potential of the waterfront area that was mostly populated
by parking lots and aging industrial property. Led by the Fan Pier
development, a 21-acre mixed use development that launched about 10 years
ago, the district has succeeded in attracting a critical mass of business,
residential and retail uses.

The new project is moving forward without any preleasing of the office
space, increasing the risk to Tishman Speyer and its Chinese partners. But
Mr. Speyer said he is confident there will be strong demand for the office
space as well as the condos.

“We’ve seen a significant uptick in demand from a wide range of companies
over the last two years,” he said. “There’s also substantial demand that
wants new product and there’s very little new product under development in
Boston.”

Tishman Speyer has developed about 4 million square feet of space in China;
it has about 20 million square feet in the development pipeline there. The
firm is the only U.S. company to raise yuan-denominated funds in China for
projects in that country. It has raised two, for a total of $700 million.

Tishman Speyer also has raised a $50 million fund from wealthy Chinese
individuals for investment in New York, Washington and Boston. The firm is
developing a 655-unit condominium project in San Francisco, with China Vanke
<http://quotes.wsj.com/CN/XSHE/000002> Co., one of China’s largest property
developers by market capitalization.

Mr. Speyer, who has been playing a leading role at the firm in executing
its China strategy, said he hopes to be doing more projects with Chinese
partners.

“We have an aligned view of where to invest and what to invest in,” he said.

Write to Peter Grant at [email-masked]
<javascript:_e(%7B%7D,'cvml',[email-masked]');> and Esther Fung at
[email-masked] <javascript:_e(%7B%7D,'cvml',[email-masked]');>
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-- 
James J. Bulger
Chairman
Thornton Group LLC
14 Beacon Street, Suite 804A
Boston, MA 02108
Office tel: 617.248.944