The Real Deal New York

HNA unloads 1180 Sixth Avenue to Northwood amid selling spree

Investment firm pays $305M for Midtown office property: sources
By Mark Maurer | Twitter_logo_blue copy February 15, 2018 06:08PM

From left: John Kukral, Norman Sturner, Chen Feng and 1180 Sixth Avenue

UPDATED, Feb. 16, 10:19 a.m.: In the latest purge of its U.S. assets, HNA Group has sold the Midtown office building at 1180 Sixth Avenue.

Northwood Investors, an investment firm led by John Kukral, picked up the 22-story, 384,000-square-foot property from HNA and its partner MHP Real Estate Services for $305 million, The Real Deal has learned.

The embattled Chinese conglomerate was hoping to get a head start last year in selling off its cash-strapped assets. HNA Property Holdings, an affiliate of HNA Group, and MHP had put 1180 Sixth on the market and spent months last fall negotiating with Nightingale Properties, which was on the hunt for an equity partner.

At the time Nightingale was negotiating, pricing was said to be around $320 million, but has since dropped. Sources said those talks broke down late last year.

Eastdil Secured represented the sellers in the deal, sources said. The parties could not be immediately reached for comment.

In 2007, Carlyle Group and MHP (then Murray Hill Properties) bought the building, located between West 46th and 47th streets, for $300 million. Then, in 2011, HNA paid $259 million for a 90 percent stake in the property, buying out Carlyle. At the time, Carlyle was delinquent on $277.5 million in loans attached to the property. MHP stayed on as a minority partner.

As its debt troubles have heightened, HNA has become more aggressive in its sales plans, targeting $16 billion in global assets to sell in the first six months of 2018 alone. The company sold a commercial townhouse on the Upper East Side for a record-breaking $90 million to Ukrainian-born American billionaire Len Blavatnik earlier this month.

Also on the chopping block are 850 Third Avenue, which it also co-owns with MHP, and 245 Park Avenue, which it just bought for a whopping $2.2 billion from Brookfield Property Partners last year. The latter property was the city’s largest investment sales deal in 2017.

HNA is also already negotiating with prospective buyers such as Brookfield Asset Management for two of its London office buildings, Bloomberg reported this week.

Northwood, which is based in Denver, Los Angeles and New York, also recently closed a $150 million loan to refinance its Financial District office tower at 100 Broadway.