Tishman Speyer has formed a joint venture with China Vanke, the largest residential developer in China, to build two residential towers in San Francisco. The deal marks the China-based developer’s first investment in North America.
According to a statement from Tishman, the New York-based real estate developer and China Vanke have partnered to develop a high-rise residential condominium project at 201 Folsom Street in San Francisco. The planned development, which will be managed by Tishman, will consist of two connected towers – 37 and 42 stories high – with a total of 655 residences.
Although financial terms of the joint venture were not disclosed, sources familiar with the matter told PERE that the project is expected to cost approximately $620 million. Various media reports have revealed that Vanke will own 70 percent of 201 Folsom Street, while Tishman will retain a 30 percent stake in the project.
For China Vanke, the joint venture marks the beginning of its planned expansion outside China, as indicated in recent public statements. The developer plans to continue exploring similar opportunities abroad.
“China Vanke always has been a company with a global view, good at learning from excellent peer enterprises. We are entering the US market to continue this learning process, to understand business models in a mature market and accumulate management experience through project cooperation,” said Shi Wang, chairman, in a statement. “We selected the 201 Folsom project as Tishman is a global industry leader and a business partner that inspires our full confidence.”
In turn, the joint venture expands Tishman’s relationship base in China, where it has raised funds from Chinese investors and currently has approximately 20 million square feet of property at various stages in its development pipeline. It also expands the developer’s footprint in San Francisco, where it previously developed The Infinity residential towers and the 555 Mission Street office building and its current local holdings include 650 California Street, One Bush Street and 595 Market Street. The firm also broke ground on its Foundry Square III office project last year and is finalizing preparations to build an office tower at 222 Second Street.
“This landmark joint venture with China Vanke in San Francisco complements the growth of our platform in China, and we could not be more excited about working closely with such a spectacular company,” said Rob Speyer, president and co-chief executive. “We welcome the opportunity to create another iconic residential property in San Francisco, following the great success of The Infinity.”
Wang, along with China Vanke’s strategy and investment team, led the deal for the China-based developer, while Speyer led the deal for Tishman.
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