Federal Government May Try To Take Control Of HNA’s Stake In 850 Third Ave.
The Trump administration is reportedly considering a plan to seize a majority stake in 850 Third Ave., a Manhattan office tower, from Chinese conglomerate HNA Group.
The seizure has been planned for months, the New York Post reports, and is linked to a national security concern. It is part of the increased powers of the Committee on Foreign Investors in the United States that were passed by Congress this month, according to the Post.
If the administration does take control of the building, it will then be placed into a trust and potentially sold. HNA’s partner on the building is MHP Real Estate Services, led by Norman Sturner, who is reportedly on the hunt for a partner to pay $460M for the stake before the government moves in.
“There is no seizure or forced sale of 850 Third Ave. underway or pending, and it is grossly inaccurate and misleading to suggest otherwise,” an HNA spokesperson told the Post.
“Out of respect for the confidentiality of the CFIUS process, we will not comment beyond that except to note that there are unique facts and circumstances regarding the location of this particular property that did not exist at the time of purchase, which have raised concerns and HNA Group is taking measured steps to address them, consistent with our commitment to working cooperatively with regulatory authorities everywhere we operate.”
According to a report from Bloomberg, an area of concern is that the building has one of only two police precincts in proximity to Trump Tower. HNA is trying to shed around $4B worth of real estate in the United States, following a tear of pricey, international acquisitions over the past few years.
It paid $2.2B to Brookfield for 245 Park Ave. in 2017, which was one of the biggest single-asset sales in the city’s history. The office building has been on the market since February, although the two owners scored a $342M loan from group led by French bank Natixis in June, The Real Deal reported at the time.
Discovery Communications leases around 160K SF at the building, but is leaving to go to a new headquarters at TF Cornerstone’s 230 Park Ave. South as part of its merger with Scripps Networks.
