HNA sold 850 Third Avenue at a $41 million loss
HNA Group confirmed today that it has sold a majority stake in a Manhattan office building, as the financially hobbled mainland conglomerate races to sell assets and raise cash.
The parent company of China’s Hainan Airlines said that it had sold its 90 percent stake in 850 Third Avenue in New York in a deal which, according to an account in US website Bisnow, is valued at $422 million.
The disposal comes less than two and a half years after HNA had acquired the same asset in a $463 million transaction, and follows US government scrutiny of the Chinese firm’s ownership of a building which houses the police precinct that protects Trump Tower.
HNA Finds Friendly Locals Willing to Buy at a Discount
The buyer of the 617,000 square foot (57,321 square metre) Manhattan office property is local investor and real estate developer Jacob Chetrit and his sons, as confirmed in an emailed statement by HNA’s minority partner in 850 Third Avenue, New York-based real estate firm MHP.
“We look forward to working with and providing more opportunities to our friends, Jacob Chetrit and his sons Michael and Simon,” MHP’s president and chief executive officer, David Sturner, said in the statement, according to an account in Bloomberg. “We are thrilled to have sold this notable asset to a well-respected and established family in the NYC real estate arena.”
Both MHP and Atco Properties & Management LLC, which also held a minority stake in the asset, are said to have sold their holdings in the 21-storey tower alongside HNA.
Cut-Rate Sale Follows Search For a Buyer
HNA chairman Chen Feng is crazy to cut deals and reduce his debt
In August last year HNA was already said to be searching for a buyer for 850 Third Avenue, with the company then asking a reported $452 million on its sole remaining New York real estate asset.
The panic sale followed reports that US regulatory agency, the Committee on Foreign Investment in the US (CFIUS), had instructed HNA that it needs to sell off its holding in the building due to US government security concerns.
At the time the company was said to have already put the property into a blind trust pending a sale in order to comply with US government orders.
Selling at Home and Abroad
The New York sale was announced during the same week that HNA was revealed as having sold off 24 floors in an office building in Shanghai’s Lujiazui financial district to a joint venture between Singapore’s CapitaLand and US private equity firm AEW. That disposal helped the company raise RMB 2.75 billion ($402 million) to pay off debts which last year were said to total as much as $100 billion.
Also this week HNA reportedly met with bankers in Asia with a new list of 20 assets that it is hoping to sell, including a hotel project in Harbin, China. That asset roster is in addition to a set of 82 properties that HNA was said to be shopping to investors in October last year.
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