Here’s how much money HNA Group’s
245 Park Avenue makes

Fitch report looks into the financials on the largest investment sale of 2017

Jul.July 17, 2017 07:30 AM

245 Park Avenue and HNA Chairman Chen Feng (Credit: Google Maps and Getty Images)

What can HNA Group TRData LogoTINY expect from the city’s largest investment sale so far this year? Aside from increased scrutiny by Chinese regulators, somewhere between $108.8 and $115.3 million in net operating income annually over the next decade.

That’s according to a recent report by Fitch Ratings on an $811 million commercial-mortgage-back-securities issuance, of which the securitized part of HNA’s $1.75 billion financing package to purchase 245 Park Avenue is the largest part.

JPMorgan Chase underwrote NOI at 245 Park of $115.3 million when the bank put together a the large debt package for HNA in May to finance the its purchase of the 1.7 million-square-foot tower for $2.21 billion, according to the report by Fitch.

The ratings agency, on the other hand, projected a slightly lower figure of $108.8 million on average per year over the 10-year life of the loan.

By comparison, net operating income at Boston Properties’ General Motors Building was recently calculated at $227.3 million and $184.3 million by lender Morgan Stanley and Fitch, respectively, according to a report on the property’s $2.3 billion refinancing in June.

SL Green Realty projects NOI at the planned 1.7 million-square-foot One Vanderbilt office tower to be $198 million per year once it’s fully leased, and net operating income at Kushner Companies’ troubled 666 Fifth Avenue was reported in April to be $41.3 million in 2016, though the building lost $14.5 million after debts were accounted for.

HNA’s purchase is the largest investment-sale of 2017, but it’s unlikely the Chinese conglomerate will be shelling out for more trophy properties anytime soon. The company has reportedly put mergers and acquisitions on hold after Chinese regulators started eyeing HNA and four other heavy spenders amid a crackdown on debt.

HNA is reportedly focusing now on investing in asset-management firms and financial institutions.

(To view more details on HNA Group’s purchase of 245 Park, visit our Deal Sheet page for the transaction)

Related Articles

With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Banks, funds, mortgage REITs, and agencies like Fannie Mae and Freddie Mac have all begun adjusting their lending approach in face of the economic downturn (Credit: iStock)

These are the sectors where real estate lending is still happening: report

Angel Oak Cos. CEO Michael Fierman and Flagstar Bancorp Inc. CEO Alessandro DiNello (Credit: Angel Oak, Flagstar, iStock)

Mortgage market dries up for unconventional home loans

A WeWork office (Credit: Alex Tai/SOPA Images/LightRocket via Getty Images)

WeWork offers rent discounts as incentive to secure long-term leases

Sharif El-Gamal (Photo by Desiree Navarro/WireImage)

WATCH: Developer Sharif El-Gamal has Covid-19. But he’s one of the lucky ones

Gary Barnett, Central Park Tower, and the Tel Aviv Stock Exchange Bull (Credit: Wikipedia, iStock)

Extell’s Israeli bonds put on downgrade watch

Knotel CEO Amol Sarva 

Another huge round of layoffs for Knotel