HNA Group Transaction Resolves Two Important Issues
Recently, the HNA Group sold off a Manhattan property. Business Times SG highlighted the issue for its importance on two fronts. It was sold off to aid in paying off the HNA Group's sizeable debts. More importantly, it is also removing concerns about Chinese property being so near the Trump Tower found close by.
The deal was completed according to a statement released by the firm. No details were released, however, although it was reported that Jacob Chetrit, a real estate developer and investor, and his son were on the receiving end of that deal. It was completed via a US$422 million transaction. The company earlier bought the tower for US$463 million, giving them a loss of $41 million in the deal.
The HNA Group that owned the tower was composed of institutions in the following manner: Chinese company HNA was the majority owner, has 90 percent ownership of the tower. It included minority partners MHP Real Estate Services and Atco Properties & Management, which owned the remainder of the tower's overall value.
Mingtiandi reported that David Sturner, president, and CEO of minority partner MHP, was pleased with the deal. He expressed a desire to work with and accommodate the group of new majority owners Jacob Chetrit and sons Michael and Simon. The Chetrit family are well-known in the NYC real estate scene, and are well-respected and established in the area as well.
It is interesting to note that the HNA Group might have no plans to sell off its property. However, a 'panic sale' was instigated, following word that the Committee of Foreign Investment in the US (CFIUS), a regulatory agency, had sent instructions to HNA that this property needed to be sold off. The basis? The US government had sent feelers that it had security concerns, following the proximity of the tower with a property that belonged to the Trump group.
As it appears, the sale is just the latest among a collection of property disposals that HNA has agreed to. Most of the properties amount to around US$20 billion, with properties in San Francisco and Minneapolis also sold off to pay its debts. The Manhattan tower was only notable for its ties to national security issues.
This also happens amidst a series of events in the China-US tension. China's government had agreed to help HNA, the local company with the most collection of foreign-owned buildings since 2017.