In yet another Japanese takeover of an American institution, Mitsubishi Estate Co. plans to pay $846 million for control of the company that owns the landmark Rockefeller Center and Radio City Music Hall.
The announcement late Monday by Mitsubishi, one of Japan's largest real estate companies, follows last month's announced takeover of Columbia Pictures Entertainment Inc. by Japan's Sony Corp. for $3.4 billion. It also continues a trend of major Japanese real estate purchases in the United States.Rockefeller Group Inc., which owns and manages the 19-building Rockefeller Center complex in midtown Manhattan, is a legacy of a family whose name stands for American capitalism.
The family, which controls the private company, traces its fortune to John D. Rockefeller, who founded the Standard Oil trust.
Family members said they decided to sell 51 percent of their shares in Rockefeller Group to diversify the company's holdings, which also include the Cushman & Wakefield commercial real estate group. The family's shares are held in various trusts.
Last month, Rockefeller Group confirmed reports that it was seeking an outside investor to buy part of the company. The reports said some family members wanted more income from their investments. Most of the family members' inheritance is tied up in real estate and corporate holdings.
But the independent trust committee that manages the family's trusts said Monday the money from the sale to Mitsubishi would be reinvested in other Rockefeller Group operations. William G. Bowen, chairman of the trust committee, said one objective was to diversify the company's holdings, which are concentrated in real estate.
"The sale of a large block of shares to Mitsubishi was approved because it offered a most unusual opportunity to enhance the long-term prospects of the Rockefeller Group and Rockefeller Center while simultaneously rebalancing the trust portfolio," Bowen said.
In a statement, David Rockefeller, Rockefeller Group's chairman and son of John D. Rockfeller Jr., said, "Our agreement with Mitsubishi Estate preserves the abiding commitment to Rockefeller Center and New York City which my father made more than 50 years ago, and which present generations of the family continue to feel."
Rockefeller Group officials said the company's board, its advisers and the trust committee considered other options before they decided on the sale, whose closing date was not announced.
Four years ago, Rockefeller Group refinanced Rockefeller Center by taking out a $1.3 billion mortgage on some of the rentable space, then selling shares in that mortgage to the public through a real estate investment trust.
The Rockefeller family fortune was estimated at $900 million in 1911, when the Standard Oil trust was busted into several companies. Today, Forbes magazine estimates the combined family wealth at more than $5 billion.
The 22-acre Rockefeller Center complex includes the 65-story General Electric Building, formerly called the RCA Building, which contains the Rainbow Room and NBC's headquarters; Radio City Music Hall, home of the Rockettes; a famed outdoor ice-skating rink; the Time-Life building and The Associated Press Building, headquarters of the news service.
The Art Deco center, built in the 1930s, is one of the first large-scale urban developments. Its buildings are the home of many well-known corporations, such as Time-Warner Inc., McGraw-Hill Inc. and Morgan Stanley & Co. Inc.
Mitsubishi Estate, which is publicly traded and has historical ties to the auto giant of the same name, is one of Japan's largest real estate companies. Its other major U.S. investments include partnerships that built a $500 million office building at Citicorp Plaza in Los Angeles and a 2,300-acre resort complex at Palm Desert, Calif.