Real Estate Holdings May Be on AIG’s Asset List for Sale

American International Group Inc., selling assets to repay a U.S. government loan, may seek buyers for some of its $16 billion in global real estate holdings.  
 
The largest U.S. insurer, which agreed last week to an $85 billion federal loan to stay afloat, may find eager buyers for property it owns in more than 30 countries and 14 U.S. cities. In Manhattan alone, it controls three office buildings with 2 million square feet. 
 
"Many of AIG's properties could be trophy properties that don't come up for sale very often,'' said Ray Torto, Boston-based global chief economist for CB Richard Ellis Group Inc., the world's largest commercial real estate broker. That could spur interest from multiple bidders, he said. 
 
AIG's plans to sell assets comes as demand for real estate slumps and banks hoard cash, creating hurdles for investors seeking to obtain financing. U.S. commercial property prices fell 9.7 percent in July from a year earlier, according to Moody's Investors Service. The number of transactions fell 28 percent in the first half from a year ago. 
 
Company investors may demand a shareholder vote on the federal loan plan, according to a person familiar with the situation. The investors, trying to derail the U.S. takeover, decided at a meeting yesterday in New York City to ask for financial data from the company, said the person, who declined to be identified because the talks were private. 
 
Chief Executive Officer Edward Liddy told CNBC yesterday the insurer's plane-leasing unit will be "an interesting business to sell.'' He said a decision on unit sales will be made "within seven to 10 days."

Published on September 23, 2008