HNA Group Gets $1.75B Loan To Fund $2.2B Park Avenue Purchase

HNA Group made a huge statement about China's staying power in the New York City market last month, and now an amalgam of lenders is backing the Chinese conglomerate.

HNA and a still-undisclosed partner put 245 Park Ave. under contract in mid-March, agreeing to buy the building for $2.2B from Brookfield and the New York State Teachers' Retirements System. HNA, like other Chinese firms, is restricted from moving cash out of the country, but many transactions recently made by Chinese firms in New York City have been cash. HNA is acquiring 245 Park largely through debt.

A group of lenders led by JPMorgan Chase has provided a 10-year, $1.75B loan to HNA for the acquisition, a ratio of roughly 79% loan-to-value, according to Commercial Mortgage Alert. JPMorgan provided 25% of the loan, CMA reports, with Deutsche Bank, Barclays, Natixis and Societe Generale rounding out the capital stack.

Societe Generale is one of the building's tenants. Major League Baseball plans to vacate its offices in the building when it moves to its 400K SF new home at 1271 Sixth Ave., in the former Time Inc. space.

CBRE's Darcy Stacom and Bill Shanahan brokered the sale, and CBRE and Cooper-Horowitz arranged the loan, according to CMA.

While moving cash may continue to be an issue for Chinese investors, many have capital already placed in the U.S. Another popular avenue, which HNA has elected to take, is to take out loans and bank on finding a way to pay it off — or hope the investment restrictions are lifted — before maturity.

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