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

New York /
Jul.July 17, 2017 07:30 AM

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

arrow_forward_ios
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
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
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
The Torkian Group's Hersel Torkian and 250 East 83rd Street (Getty, Google Maps, The Torkian Group)
Torkian nabs $145M loan for Upper East Side development
Torkian nabs $145M loan for Upper East Side development
Triangle Equities' Lester Petracca with 533 Main Street (Triangle Equities, Getty)
Record East Orange project lands $317M financing
Record East Orange project lands $317M financing
198 Scholes Street, 65 Kent Avenue, 506 DeKalb Avenue and 11 Gunther Place (Illustration by the Real Deal with Getty, Google Maps)
Avi Philipson deal to acquire All Year portfolio is back on
Avi Philipson deal to acquire All Year portfolio is back on
From left: Trinity Place Holdings’ Matthew Messinger and Macquarie Group’s Shemara Wikramanayake along with 77 Greenwich Street (Getty, Trinity Place Holdings, Macquarie Group, Google Maps)
Trinity Place gets extension to finish pandemic-slowed 77 Greenwich
Trinity Place gets extension to finish pandemic-slowed 77 Greenwich
Estate Partners' David Aviram, FIA Capital Partners' David Goldwasser and Steve Croman (LinkedIn, Google Maps, Getty)
Steve Croman: I was duped by predatory lender
Steve Croman: I was duped by predatory lender
From left: McSam Hotel Group's Sam Chang and SL Green's Marc Holliday with 711 Seventh Avenue  (Getty, Google Mpas, SL Green)
Times Square hotel developer sues neighbors over delayed demolition
Times Square hotel developer sues neighbors over delayed demolition
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...