https://www.mingtiandi.com/real-estate/outbound-investment/cfius-forcing-hna-to-sell-463m-nyc-office-tower/
Trump Said Forcing HNA to Sell $463M NYC Office Tower | by Michael Cole Aug 14, 2018
“…850 Third Avenue in New York may have too good of a view of Trump Tower …
HNA has already sold more than $17 billion in assets in 2018, but even that hypersonic rate of disposals may not be fast enough for the US government, which is now said to have given the Chinese conglomerate an ultimatum to sell off its 90 percent stake in a Manhattan office tower. The Wall Street Journal reported on Friday that within recent months the Committee on Foreign Investment in the US (CFIUS) has instructed HNA that it needs to sell off its holding in 850 Third Ave in New York. While no clear indication is said to have been given for the forced sale, the 21-storey office building one-half mile from Trump Tower is home to a police precinct that provides protection for the orange-hued president’s gilded Manhattan headquarters.
The shotgun sell-off of the office tower adds to pressure on HNA which just last week raised around $332 million by selling Radisson Hotels AB as “Buddhist billionaire” Chen Feng’s Hainan-based conglomerate races to raise enough cash to pay down a debt load that earlier this year was estimated at as much as $100 billion. A $463 Mil Building with Excellent Access to Trump Tower … HNA, together with New York real estate investment firm MHP Real Estate Services, bought the Manhattan commercial building in April 2016 in a deal valued at around $463 million – before Trump had secured the Republican nomination and later the US presidency.
The Journal account emerged after the New York Post had reported that the US government was ready to seize the 617,000 square foot (57,321 square metre) office building on national security grounds. HNA was quick to refute the tabloid’s report, while not denying that the Chinese conglomerate’s ownership of the tower located between East 51st and 52nd streets in Midtown had been the subject of discussions with US authorities.
“There are unique facts and circumstances regarding the location of this particular property that did not exist at the time of purchase which have raised certain concerns”, an HNA spokesperson said in a statement. The company added that it is “working cooperatively with regulatory authorities” to resolve the issue…
In the Trump administration CFIUS has begun reviewing real estate deals…CFIUS, which in earlier years focused its role in reviewing foreign investments in the US on transfers of technology and other sensitive issues, has been expanding its purview to cover a wider range of investments, at the same time that tensions between the US and China having been rising over trade and national security concerns.
An account in New York’s Commercial Observer noted that, should the government actually strip HNA of its ownership of the building, it would mark a significant expansion of CFIUS’ involvement in real estate deals. “We’re seeing this happen for the first time in real estate,” the business publication cited Y. David Scharf, a partner and the chair of the real estate finance and restructuring at Morrison Cohen as saying. “Real estate is a new add-on under the statute, literally eight days ago.”