Wednesday 12 December 2018

HNA offloads Manhattan tower for $300m

HNA Group Co has reportedly sold 1180 Avenue of Americas in New York City
HNA Group Co has reportedly sold 1180 Avenue of Americas in New York City

David M Levitt

HNA Group, the debt-laden Chinese conglomerate seeking buyers for real estate globally, sold a Manhattan office tower for at least $300m (€241m), according to two people with knowledge of the deal.

Northwood Investors LLC, a firm led by John Kukral, bought the 398,892 sq ft (37,058 sq m) tower at 1180 Avenue of the Americas in Midtown, said the people, who asked not to be identified because the sale hasn't been disclosed publicly.

David Chen, an HNA representative, didn't respond to voicemail messages and an email seeking comment on the sale. Kukral and Northwood representatives also didn't respond. The transaction was first reported last Thursday by the Real Deal.

In the US, HNA has been marketing commercial properties in New York, Chicago, San Francisco and Minneapolis valued at a total of $4bn, including the Avenue of the Americas tower, according to a marketing document seen by Bloomberg last week.

HNA first began seeking a buyer for 1180 Avenue of Americas early last year. It bought a 90pc stake in the property in 2011 in a deal that valued it at $274m, according to data from research firm Real Capital Analytics.

Norman Sturner, founding principal of MHP Real Estate Services, which held the other 10pc of the tower, said HNA bought his stake last Thursday. Sturner said he had no direct knowledge of any sale of the property by HNA.

Closer to home, HNA has also held initial talks with investors about selling a pair of office buildings in London's Canary Wharf district, people with knowledge of the matter said. Private-equity firms including Brookfield Asset Management are considering making bids after HNA asked suitors to submit letters of intent before it would allow access to view the buildings, the people said, asking not to be identified because the process is private.

Toronto-based Brookfield, which is one of the owners of the buildings' original developer, Canary Wharf Group, is weighing an offer that could also include other properties from HNA's global portfolio, the people said. Spokesmen for Brookfield and HNA declined to comment.

HNA, the aviation-to-hotels conglomerate, plans to sell about 100 billion yuan (€12.8bn) of assets in the first half of this year as it attempts to stave off a liquidity crunch, people with knowledge of the matter said last month.

The company, which started as a regional Chinese airline before buying stakes in everything from Deutsche Bank to Hilton Worldwide Holdings, is also looking to offload assets to conform with a campaign by its government to stem capital outflows.

No single adviser has been mandated to conduct a formal global sales process, and HNA is engaged in piecemeal discussions with bidders interested in buildings around the world, the people with knowledge of the talks said.

A deal has yet to be agreed for the Canary Wharf properties at 30 South Colonnade and 17 Columbus Courtyard, and there's no certainty a transaction will take place, they said.

HNA is unlikely to recoup the £366m it paid for the two buildings because the tenants of both properties intend to leave and prices have fallen in the district since the Brexit vote, the people said.


Sunday Independent Supplement

Business Newsletter

Read the leading stories from the world of Business.

Also in Business