Editor’s note:
Hello Google, farewell HNA

Mar.March 01, 2018 10:00 AM

Stuart Elliott

The priciest New York City real estate deal in 2017 already looks to be going south, thanks to what one industry player called “one of the most reckless investors I’ve worked with.” And it was Chinese money that was at play — part of a new phase of global capital that’s entering and leaving the city.

The Real Deal reporter Konrad Putzier lays out the shocking fall of Chinese conglomerate HNA, which is now struggling under a $90 billion debt burden after going on a worldwide acquisition spree. Early last month, news broke that HNA would put its most prized Manhattan trophy, 245 Park Avenue, up for sale after purchasing it for a record $2.2 billion just nine months earlier. The tower is expected to sell at a loss as the firm seeks to unload about $4 billion in U.S. real estate assets, including other properties in New York.

And while HNA beats a hasty retreat, it isn’t alone. Anbang Insurance Group — whose prolific spending tear included snapping up the Waldorf Astoria — was taken over by the Chinese government last month in a move to reportedly prevent the company from collapsing. “I’ve never seen such a turn in the industry,” said Marcus & Millichap broker Eric Anton, referring to the exodus of some large Chinese players. “It was a surprise to almost everybody.”

Foreign investment was seen as a savior in the years following the Great Recession, but the picture is more mixed now. There is Chinese money on the run and tainted cash from other corners of the world. Our cover story, by E.B. Solomont and Will Parker, examines how the Department of Justice is looking to dispose of forfeited properties totaling billions. At the top of the list, the Feds need to unload 650 Fifth Avenue and the Park Lane Hotel, which was seized from Malaysian financier Jho Law as part of a money laundering investigation. But do bureaucrats have what it takes to sell the property for top dollar in the shark-eat-shark world of NYC real estate?

Meanwhile, the priciest building purchase of this year — Google’s mammoth buy of Chelsea Market for $2.4 billion — appears to be a lot more stable than HNA’s Park Avenue play. The tech giant, which has $14.5 billion in real estate assets, seems to be in it for the long haul, snapping up more and more of West Chelsea. We look behind the recent deal, first reported by us, and what it means for the neighborhood. Find that story here. A little farther uptown, we examine retail guru Ken Himmel’s vision for Related’s Hudson Yards shopping hub and the prognosis for success amid a weak retail market. Can Himmel replicate the results he brought to the Time Warner Center a decade and a half ago?

Finally, check out coverage of The Real Deal’s first-ever comedy event last month, which benefited a cancer charity. And there’s a lot more coming up. If you’re on the West Coast, come to our first quarterly neighborhood real estate forum in Los Angeles on March 7. Our annual Long Island special issue just hit the newsstands, and we’re launching a weekly email newsletter for that market. And stay tuned for our new property listings section at TheRealDeal.com, as well as our upcoming launch in Chicago.

Enjoy the issue!


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)
Hudson Yards megadevelopment inspires a new line of sex toys
Hudson Yards megadevelopment inspires a new line of sex toys
Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)
Ruby Schron lands $500M refi for sprawling Queens apartment portfolio
Ruby Schron lands $500M refi for sprawling Queens apartment portfolio
Wendy Silverstein (Credit: Getty Images)
Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
555 California Street with Steve Roth and Donald Trump (VNO, Getty/Patrick McMullan, Getty)
What tenants pay at Vornado and Trump’s 555 California Street
What tenants pay at Vornado and Trump’s 555 California Street
With major financial choices to make, Newmark receives $850M infusion
With major financial choices to make, Newmark receives $850M infusion
With major financial choices to make, Newmark receives $850M infusion
Gotham Organization Chairman Joel Picket with the proposed development at 130 Felix Street. (Getty, 130 Felix)
These projects just beat the rezoning deadline
These projects just beat the rezoning deadline
John Kilroy and the Indeed Tower (Getty, Page Southerland Page)
Kilroy Realty buying Indeed Tower in Austin for $580M
Kilroy Realty buying Indeed Tower in Austin for $580M
Photo Illustration of Airbnb CEO Brian Chesky and Vrbo CEO Jeff Hurst (Getty)
Home invasion: Vrbo aims to poach listings from Airbnb as summer heats up
Home invasion: Vrbo aims to poach listings from Airbnb as summer heats up
arrow_forward_ios

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

Loading...