AIG to Sell Tokyo Building, Puerto Rico Hotel, Dubai Properties

By | February 13, 2009

American International Group has put a prized building in Tokyo up for sale and is in advanced talks to sell a hotel in Puerto Rico and two office buildings in Dubai, a top executive said Thursday.

The sales are part of AIG’s plans to dispose of assets and businesses to pay back the U.S. government after a rescue last year.

These auctions will help the insurer better understand the market for real estate assets it plans to sell, said Eric Martinez, chief restructuring officer for global real estate.

“These are the market testers for us,” Martinez said in an interview. “And so we take back the data we get from this to really understand … what we have to do next with our business plan.”

AIG has started the sales process for its Otemachi building, which overlooks the Imperial Palace in Tokyo, said Martinez. The property could fetch about $1 billion, although it was still too early in the process to know.

The first round of bids for the Tokyo property are expected in about a month and AIG hopes to have a final bidder in roughly another month and half after that, Martinez said in an interview. “The investment memorandum will go to all interested parties that have the financial wherewithal to purchase the building.”

Merrill Lynch is running the auction for the Tokyo building.

AIG is also in advanced talks to sell its San Juan Marriott hotel property in Puerto Rico, said Martinez, a former Safeco Corp executive, who recently joined the troubled insurer to help it sell assets.

In Dubai, it is in advanced negotiations to sell two fully leased, low-rise office buildings in the Emaar Business Park, Martinez said.

AIG, which also placed a funds management business for sale in January, expects to get indications of preliminary interest by the end of this month, Martinez said.

The fund management business operates 15 funds with more than $12.4 billion in assets under management as of Sept. 30. The funds have 182 investments. The investments include a Seoul building being built over a spot where two subway lines intersect, Martinez said.

He reports to Paula Reynolds, the former chief executive of Safeco, who was hired by Chief Executive Edward Liddy as AIG’s chief restructuring officer in October to oversee divestiture of assets and serve as the insurer’s main liaison with the Federal Reserve Bank of New York.

AIG, once the world’s biggest insurer by market value, averted bankruptcy in September with an $85 billion federal bailout. The rescue later swelled to about $150 billion.

On Oct. 3, the insurer said it planned to keep its U.S. property-casualty, foreign general insurance businesses and an ownership interest in its foreign life operations, but sell the remainder.

Since then, the insurer has announced the sale of some businesses, including the sale of HSB Group to German reinsurer Munich Re for $742 million and its Canadian life insurance unit to Bank of Montreal for about C$375 million.

AIG shares closed down 6 cents at 90 cents on the New York Stock Exchange.

(Reporting by Paritosh Bansal; Editing by Andre Grenon)

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