Property mogul Donald Trump and a group of Hong Kong investors have struck a $1.8 billion deal to sell a parcel of land in Manhattan in another sign that New York's real estate market is booming.
Private equity firm Carlyle Group and Extell Development Corporation, developer of the 60-story Orion condominium tower near Times Square, have tentatively agreed to buy the parcel of land that Trump originally bought in 1985 for $82 million.
Trump and the Hong Kong investors, represented by Hudson Waterfront Associations, are 50:50 partners in the deal.
Carlyle and Extell plan to build as many as 3,000 apartments on the 77 acres from 59th to 72nd Streets near the Hudson River. The land, a former railway yard, already includes three rental buildings.
Trump has other buildings in New York and is building high-rise condos in Chicago and Las Vegas.
His casino company, Trump Entertainment Resorts, separate from his real estate business, last month emerged from Chapter 11 bankruptcy protection.
With the average price for a condo in Manhattan well above $1 million and land increasingly scarce, investors and developers are eager to snap up property.
Prices for condos have more than doubled in the past five years or so, giving rise to fears that a bubble is forming.
Others say the property market in New York remains strong.
"New York is a unique market in the country. It's not speculative," said Pamela Liebman, chief executive of the Corcoran Group, a leading residential broker. "It's incredibly deep with everyone from first-time home buyers to retirees looking for a place in New York."
Carlyle's part in the deal reflects a trend among private equity firms to invest in real estate as equity markets remain uncertain and unstable.
Some private equity firms are also buying companies specifically for the value of their real estate.
Hotel properties in New York are also prime targets for acquisition as investors convert the buildings into condominiums.