After Bankruptcy, HNA Group Affiliate Defaults On 245 Park Ave. Loan

An affiliate of troubled Chinese investor HNA Group has defaulted on its mortgage at the former office building of Major League Baseball.

PWM Property Management failed to make its November payment on a $500M CMBS loan at 245 Park Ave., which has been sent to a special servicer, according to commercial mortgage-backed securities firm Trepp.

HNA paid $2.2B for the 1.8M SF Midtown office building, in 2017 and financed the transaction with $1.2B in CMBS debt from a consortium of JPMorgan Chase Bank, Natixis, Barclays, Deutsche Bank and Société Générale, The Real Deal reported. That debt was broken into 15 notes, according to Trepp, and nine portions that combine to make up $500M of the outstanding $826M in debt are now in special servicing.

PWM filed for bankruptcy protection on Halloween, claiming that SL Green — which manages the property after purchasing a $148M preferred equity stake in the building in 2018 — was at fault for the building's poor performance. Major League Baseball vacated its 220K SF offices to move to Sixth Avenue, and 245 Park has yet to fill the vacancy.

PWM claimed in court documents that SL Green has deliberately steered companies toward other buildings the REIT owns — it also stands to take over the property from PWM if it can't meet further debt obligations.

Earlier this month, a Chinese court gave the go-ahead for a $170B restructuring after HNA filed for bankruptcy amid the continuing Evergrande crisis, The Financial Times reported.

“This claim is a desperate attempt by HNA to deflect from its blatant neglect of this prominent office tower,” SL Green told Bloomberg earlier this month. “SL Green has been a committed, diligent and honest partner to HNA as the property manager and leasing agent."

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