HNA Group is said to be selling off a controlling stake in its Manhattan office tower at 245 Park Avenue to real estate investment trust SL Green Realty, amid a panic sale of more than $14.5 billion in assets by Chinese conglomerate so far this year.
SL Green, New York’s largest office landlord, is reportedly taking a stake that will provide it with operating control in the 51-year-old tower and a preferred position in the joint venture that holds the property, according to a Wall Street Journal account citing people familiar with the deal.
The amount SL Green is paying and the size of the stake could not be determined.
HNA bought the 1.7 million square foot (158,000 square metre) tower in March of last year for $2.21 billion from a joint venture between Brookfield Property Partners LP and the New York State Teachers’ Retirement System.
The 45-storey Park Avenue tower houses tenants including private equity firms Angelo, Gordon & Co and Ares Management, along with Dutch financial services firm Rabobank, JP Morgan Chase and Major League Baseball. The office tower is just a three-minute walk from the Grand Central Terminal and is surrounded by headquarters of banks and upscale hotels including Waldorf Astoria, InterContinental and Marriott.
HNA Restructures Part of Corporate Empire
Apart from shedding assets in the US, HNA Group is undertaking some internal restructuring closer to home. Last Friday, listed subsidiary HNA Infrastructure Investment Group announced to the Shanghai stock exchange that it would buy full ownership in HNA Finance I from Beijing HNA Financial Holding for RMB 10 billion. HNA Finance I holds a 74.66 percent stake in Hong Kong-listed Hong Kong International Construction Investment Management Group (HKICIM), another unit of HNA Group.
HKICIM owns HNA’s sole remaining residential project in Hong Kong’s Kai Tak area, after it sold off three other projects in the former airport site for a total of HK$21.4 billion this year.
HNA previously reshuffled another part of its sprawling business empire by announcing in March that Hainan Airlines, the group’s flagship carrier, would take over the conglomerate’s hotel business along with several aviation businesses from HNA Group.
Asset Fire Sale Continues
HNA has been selling its assets to pay off a mountain of debt, estimated at $100 billion, that it built up in the course of a buying spree from 2015 to 2017. The once-acquisitive conglomerate has reportedly spent over $45 billion snapping up overseas assets from Deutsche Bank to Hilton Worldwide during the period.
Earlier this month, the Chinese company sold the Minneapolis City Center mall and an adjacent office building for $320 million, in the same week that HNA disposed of its stake in Spain’s NH Hotel Group to Thailand’s Minor International for $726 million.
The pair of deals came a week after the Hainan-based group was reported to be offloading the office building 123 Mission Street in San Francisco to New York-based real estate investment firm Northwood Investors for $290 million.
The recent sales totalling $1.3 billion this month had brought HNA’s total disposals in 2018 to over $14.5 billion, according to Bloomberg.