NEW YORK – Debt-ridden Chinese conglomerate HNA Group Co. is in talks to sell Manhattan’s 850 Third Ave. — a building under scrutiny by the U.S. government because of its proximity to Trump Tower — to a New York-based real estate company, according to sources.
The transaction with B&L Management Co. values the 21-story building at $452 million and would cause HNA to realize a loss, according to the people, who asked not to be identified because the talks aren’t public. A contract has yet to be signed, and no deposit has been made, the people said. HNA owns 90 percent of the building, with minority partners MHP Real Estate Services and Atco Properties & Management LLC owning the rest. Both partners have waived their rights to match the offer, a move that would’ve required seeking an equity partner to step in for HNA’s stake.
Any sale to a U.S. buyer would likely satisfy concerns from the Committee on Foreign Investment in the U.S. regarding HNA’s ownership of the building, which is just four blocks away from Trump Tower. HNA and its partners paid $463 million for the Third Avenue tower in 2016, before Donald Trump became president, and the Chinese company has been trying to sell it since at least February.
Representatives for B&L didn’t respond to requests for comment. A representative for HNA wasn’t immediately able to comment.
CFIUS reviews the national security implications of foreign investments. There are “unique facts and circumstances” regarding the location, a representative for HNA said earlier this month. One potential issue is that 850 Third houses one of only two police precincts that are within a mile of Trump Tower, the president’s base when he’s in New York. HNA has said it’s taking steps to address CFIUS’s concerns — issues that didn’t exist when HNA bought the property.