Andrew Chung’s Innovo Property Group grabs HSBC building in Bryant Park
Eli Elefant’s Property and Building Corporation lets go of Midtown trophy asset
The Israeli company that owns the HSBC Tower in Midtown Manhattan has found a hometown buyer in the Innovo Property Group, which has agreed to purchase the trophy asset for $855 million.
Reuters is reporting that the Tel Aviv-based funding giant Israel Discount Investments announced the sale on Sunday to the company headed by Andrew Chung, taking a net loss of $45 million on the building in an attempt to boost liquidy and reduce debt as part of a plan to reinvest company dollars in Israel.
With the purchase of the 30-story tower, IPG, which already owns a 20 acre industrial site located at 2505 Bruckner Boulevard in the Bronx and recently purchased a 9-acre site at 1110 Oak Point Avenue and 155 Tiffany Street in Hunts Point, is getting hold of a signature property loaded with class-a office space.
The sale is expected to be completed on April 1, 2022, according to Reuters. A subsidiary of IDB Group, Eli Elefant’s Property and Building Corporation placed the value of the skyscraper, located at 452 Fifth Avenue near Bryant Park, at $864 million as of Sept. 30. In October, it hired Eastdil Secured’s Roy March and Gary Phillips to market the property and had expected to get at least $850 million, or $982 per square foot, for it.
PBC bought the building for $330 million, or $381 per square foot, in 2010 from HSBC when the bank was selling office properties in wake of the financial crisis. It then invested $100 million to renovate the tower, adding a new entrance and lobby and high-rise elevators. The site is also home to a 10-story Beaux-Arts Knox Building constructed in 1902.
Back in 2017, HSBC, inked a deal to continue leasing its 548,000-square-foot space at the tower through 2025. The original lease was set to expire this year.
Rumors of the potential sale of the building have been floating around for years. In 2015, PBD had received offers of up to $900 million for the property, bids it turned down with Elefant telling The Real Deal at that time the company was in growth mode in the US and had no intention of letting go of its trophy asset in New York City.
PBC did put the building on the market for a brief period in 2013.
Chung’s company is heavily invested in warehouse space and industrial sites in the outer boroughs, including the south Bronx, Maspeth, Queens, and Long Island City. In 2016, Chung made a play for 16 Court Street, an office tower in Downtown Brooklyn, which ended up selling to CIM Group for $171 million.
[Reuters] — Vince DiMiceli
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