Embattled Chinese firm HNA Group refinances Loop skyscraper

Chinese conglomerate is refinancing the building that it bought for $359 million in 2017 and later tried to sell

Jan.January 10, 2020 10:00 AM
181 W. Madison St. and HNA Group Founder Chen Feng (Credit: Google Maps)

181 W. Madison St. and HNA Group Founder Chen Feng (Credit: Google Maps)

After putting it on the market about two years ago, indebted Chinese conglomerate HNA Group has refinanced a 50-story office building in the Central Loop with a $240 million loan.

HNA Group received the financing for 181 West Madison Street from JPMorgan Chase, according to public records. It replaces a $233 million loan issued by MetLife in 2017, which was one of the year’s 10 biggest commercial mortgages issued in Chicago in 2017.

HNA Group bought the 937,000-square-foot building from CBRE Global Investors for $359 million in March 2017. It was one of Chicago’s 10 biggest investment sales of the year.

Less than a year later, HNA Group was seeking a buyer, Bloomberg reported. The building was only on the market for a short period of time before it was pulled, said a source familiar with the property.

In a similar move, prior owner CBRE Global Investors initially put the building up for sale in December 2015, and then refinanced with a $200 million loan from Wells Fargo Bank in February 2016.

In late 2017, amid an $86 billion-plus debt and liquidity crisis and pressure from the Chinese government, HNA Group began putting up scores of properties for sale. In its heyday, the one-time regional airline became the largest shareholder of Hilton hotels and Deutsche Bank AG. It also paid above-market prices for properties across the globe. In all, HNA spent $40 billion on global acquisitions.

In April, Bloomberg reported that HNA had sold off $25 billion worth of assets since early 2018. But even that wasn’t enough to stop creditors from seizing golf courses and other assets after one business unit missed a loan payment. HNA’s CEO Chen Feng wrote on the company’s WeChat page that 2020 would be “the decisive year to win the war” on its liquidity challenges, Bloomberg reported.

Northern Trust is the biggest tenant in 181 West Madison Street, where it occupies 400,000 square feet on a lease that runs through 2025. The building is currently 90 percent occupied.

HNA Group and MB Real Estate, which handles leasing for 181 West Madison Street, did not respond to requests for comment.

Related Articles

From left: CEO and founder of CA Ventures Thomas Scott, CEOs of WeWork Sebastian Gunningham and Artie Minson, and a rendering of the building

WeWork has troubles, but it also has a new location in River North

The Bolingbrook property along route 53 and Amazon CEO Jeff Bezos (Credit: Google Maps, Getty Images)

Amazon pays $51M for site of former Chicagoland amusement park

Jeff Bezos and the Old Wrigley gum factory at 3535 S. Ashland Avenue (Credit: Getty Images and Google Maps)

Chew on this: Former Wrigley gum factory pitched as potential Amazon warehouse

Landing CEO & founder Bill Smith and one of Landing's apartments at 30 E. Adams St.

Membership-based leasing platform Landing uses $20M Series A round to expand to Chicago

Peter E. Ricker, Chairman and CEO of MBRE, and 800-810 West Madison Street (Credit: MBRE and Google Maps)

MB Real Estate pays $19M for office building near Fulton Market

W. P. Carey Inc. CEO Jason E. Fox, Pritzker Realty Group founder and Chairman Penny Pritzker, 150 N. Clinton St. (Credit: Google Maps)

WP Carey and Pritzker Realty make big moves in West Loop

Rendering of 800 W. Fulton Market and Thor's Joe Sitt

Thor Equities lands anchor tenant for spec Fulton Market office tower

R2 Principal Matt Pistorio and buildings from the portfolio (Credit: Google Maps)

AmTrust tries the Old Post Office strategy with $1B Downtown portfolio