The Real Deal New York

HNA plans to sell billions in RE. But it will keep its Manhattan trophy tower

850 Third Avenue, meanwhile, is said to be on the selling block
December 18, 2017 01:55PM

Chinese conglomerate HNA Group plans to sell $6 billion worth of real estate in a bid to pay off debt and calm its investors.

Apart from 1180 Sixth Avenue, which it put on the market earlier this year, HNA plans to sell 850 Third Avenue, the Wall Street Journal reported. But it will hold on to 245 Park Avenue, the Midtown office tower it bought for $2.21 billion in May.

HNA’s CEO Adam Tan first announced in November that the company is mulling asset sales amid pressure from the Chinese government. “If some sectors are now restricted by government, I will consider selling assets I bought in these sectors,” he said. “We will not invest in anything the government does not support.”

The Hainan-based company has made more than $40 billion worth of acquisitions since 2015, which it funded with plenty of debt. Bloomberg reported that the firm’s debt payments are greater than its revenues, and the Wall Street Journal reported that a quarter of its $100 billion in liabilities are due over the coming year. On Friday, the Wall Street Journal reported that HNA had begun to buy back some of its own debt.

HNA plans to sell 20 commercial buildings around the globe.

In September, The Real Deal reported that HNA and partner Murray Hill Properties were close to selling 1180 Sixth Avenue to Nightingale Properties for $320 million. MHP and HNA also jointly own 850 Third Avenue, which the firms bought for $463 million in March 2016.  [WSJ]Konrad Putzier