SL Green takes over 245 Park Avenue

Office landlord scored HNA bankruptcy deal amid dispute with Chinese investor

SL Green's Marc Holliday and 245 Park Avenue (Getty Images, SL Green, Google Maps)
SL Green's Marc Holliday and 245 Park Avenue (Getty Images, SL Green, Google Maps)

SL Green capped off a long-running dispute with HNA Group at 245 Park Avenue with a deal for the Midtown tower.

Marc Holliday’s firm announced its acquisition of the 1.8 million-square-foot property on Monday. Details of the deal were not provided, but the company did note in a release that it is still pursuing a $185 million arbitration award from the Chinese investor.

MarketWatch reported earlier this summer that SL Green was the sole bidder for the property as of July.

The lenders on the Midtown property agreed to keep the $1.8 billion mortgage and mezzanine loans in place. Those loans mature in June 2027 and combine for an averaged fixed rate of 4.30 percent.

SL Green chief investment officer Harrison Sitomer in a statement deemed the property the company’s “next major development project,” following in the paths of One Vanderbilt and One Madison.

The firm plans on repositioning the property, with alterations to the lobbies, plaza, retail storefronts and infrastructure. It will also be bringing its amenities program to the building; Kohn Pedersen Fox will help in the redesign.

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This summer, a judge awarded SL Green a $185 million arbitration award, which stemmed from HNA allegedly breaching terms of SL Green’s investment and terms of guarantee.

About the same time, the REIT obtained a temporary restraining order, preventing the Chinese conglomerate from selling its assets until SL Green receives the award.

The orders came after HNA affiliate PWM Property Management accused SL Green of failing to find a new anchor tenant to replace Major League Baseball at the building, setting off a legal dispute. An arbitrator said HNA failed to prove the allegation.

PWM alleged SL Green was trying to put the tower into financial straits, claiming the office landlord would benefit because of its interest in the building, as well as the possibility of foreclosure.

SL Green joined in 2018, investing $148 million and becoming property manager. It negotiated protections for the investment in the case of issues including bankruptcy.

PWM filed for bankruptcy last year and in December 2021 pushed SL Green out as property manager. A bankruptcy judge ruled in favor of PWM’s decision to force out the REIT.

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