China’s Biggest Bank to Reduce Its Space at Trump Tower
China’s Biggest Bank to Reduce Its Space at Trump Tower
(Bloomberg) -- Two of China’s New York power players are pulling back from Trump -- Trump Tower, that is.
First, a big Chinese conglomerate, HNA Group Co., moved to sell a Manhattan office tower four blocks from Trump Tower after U.S. authorities raised national security concerns. A deal has finally been cut. Now, China’s biggest bank, Industrial & Commercial Bank of China Ltd., plans to reduce its space in Trump Tower when its lease runs out in October, people with knowledge of the matter said, creating a potential headache for the Trump Organization.
The developments -- seemingly unrelated -- underscore the delicate dance that companies foreign and domestic have faced in dealing with America’s businessman president. Donald Trump spent much of his time as a candidate criticizing China, saying the country has taken advantage of the U.S. through unfair agreements. Since taking office two years ago, Trump ignited a trade conflict with the country, rolling out tariffs and threatening additional levies, while also holding ongoing talks with Chinese President Xi Jinping.
China’s ICBC, a state-controlled enterprise and the world’s largest lender by assets, is one of Trump Tower’s largest office tenants, along with the Trump Organization, the president’s family company. The lender occupies space on three floors in the Fifth Avenue building, where it has a bank branch and about 100 employees. It plans a substantial withdrawal from the building, while retaining one floor for executive offices, according to the people.
ICBC has leased space at another midtown Manhattan building, where it will consolidate its New York locations, said the people, who asked not to be identified because the plans aren’t public.
Amanda Miller, a spokeswoman for the Trump Organization, didn’t respond to requests for comment. ICBC representatives didn’t respond after regular business hours in Beijing.
Trump’s presidency and U.S.-China conflicts have also had an impact on Manhattan real estate. A heavy Secret Service presence has been an annoyance for some Trump Tower tenants, and companies with foreign ties located close to Trump Tower have attracted the attention of the U.S. government.
Chinese conglomerate HNA’s ownership of 850 Third Ave., for example, led to scrutiny by the Committee on Foreign Investment in the U.S., partly because the building houses one of only two police precincts that are within a mile of Trump Tower, the president’s base when he’s in New York. HNA has been trying to sell 850 Third since at least early 2018, and said this week it’s finally sold the property.
Trump’s time in office has been marked by questions over financial ties between foreign governments and Trump Organization properties, including Trump Tower. As of September 2012, ICBC paid $95.48 per square foot for its Trump Tower space, more than any other major office tenant in the tower, according to mortgage documents. ICBC has about 25,000 square feet at the building, according to loan-servicer data.
The Chinese bank has leased about 100,000 square feet (9,300 square meters) at 1185 Avenue of the Americas, near Trump Tower, as of September, said the people with knowledge of ICBC’s plans. ICBC also leased space at 1633 Broadway in New York, according to its semi-annual report.
The Chinese lender, which has 27 trillion yuan ($4 trillion) in total assets, has more than tripled its number of overseas outlets to 420 over the past decade. It opened its first U.S. branch in 2008, offering international settlements, trade finance, corporate deposits and other wholesale banking services.
--With assistance from Gillian Tan and Caleb Melby.
To contact Bloomberg News staff for this story: Jun Luo in Shanghai at jluo6@bloomberg.net;Heng Xie in Beijing at hxie34@bloomberg.net;Shahien Nasiripour in New York at snasiripour1@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Daniel Taub, Alan Goldstein
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With assistance from Bloomberg