China tycoon Zhang Xin in deal for New York's GM Building

A group of investors, including Chinese real estate tycoon Zhang Xin, paid about US$1 billion for a 40 per cent stake in a landmark New York office building, a person familiar with the deal said on Sunday, in the latest sign of how foreign investors are fuelling a US commercial real estate market recovery.

The deal, which closed on Friday, comes in the same week that food company Shuanghui International agreed to buy pork producer Smithfield Foods for US$4.7 billion. That purchase, if approved, would be the largest ever acquisition of a US company by one from China.

Later this week, a summit between US President Barack Obama and Chinese counterpart Xi Jinping on trade and other issues could provide a further boost to Chinese investments.

The Sungate Trust, which is controlled by the family of Soho China chief executive Zhang, joined with M Safra and Company, the investment firm of Brazil’s Safra family, to buy the stake in the General Motors Building, which values the tower at US$3.4 billion, the source said on Sunday.

The deal makes the two million square-foot building – a 50-story tower overlooking New York’s Central Park and featuring Apple’s flagship Fifth Avenue store – the most expensive US office building.

The news comes amid talks to sell 650 Madison Avenue, another office building close to the General Motors tower, to a group of investors for US$1.29 billion, in yet another pricey transaction. New York-based Crown Acquisitions and real estate investment firm Highgate beat others, including foreign investors, to buy the 27-story office and retail tower from private equity firm Carlyle Group.