Property & Building sells HSBC Tower in Manhattan

HSBC Tower, Manhattan  credit: Shutterstock, Roman Tiraspolsky

The company has sold the 30-floor building to Innovo Property Group for $855 million.

Property & Building Corp. Ltd. (TASE: PTBL) reports that, after a competitive process, it has agreed the sale of the HSBC Tower in Manhattan to Innovo Property Group for $855 million. The sale process was led by Property & Building CEO Doron Cohen and Eli Elefant, CEO of subsidiary PBC USA Real Estate.

Property & Building also reports the sale of its entire ownership rights in Beit Nechasim in Hamasger Street in Tel Aviv for NIS 390 million.

"The management is working energetically to implement the decision by the board of directors to focus the company's activity on income producing assets in Israel," Cohen said. "We are satisfied with the sale of HSBC Tower at an excellent price. We have succeeded in disproving the gloomy forecasts heard at the beginning of the year about the commercial real estate market in the US. The significant proceeds from these two deals are important to the company at this time for advancing its policy. We are continuing with this policy and we are examining possibilities for realizing additional assets in the US and Israel, among them the Tivoli Village project in the prestigious Summerlin neighborhood of Las Vegas. The company has hired the services of a realtor to that end. Realization of the assets increases the company's liquidity and allows it room for discretion between reducing debt and increasing its holdings in its core activity."

Property & Building bought the HSBC Tower together with Koor in 2009 from HSBC for $353 million. In 2011, Property & Building bought out Koor's share. The tower is located on Fifth Avenue in the heart of Manhattan, close to Bryant Park and the New York Public Library. It is 30 floors high, contains 80,000 square meters of space, and is 99% occupied.

The northern part of the building, which is slated for preservation, was constructed in 1901-1902 and was known as the Knox Building. In 1964, the building was sold to the Safra family's National Bank of New York. In the 1990s, the building was expanded, and sold to HSBC.

On completion, after repayment of the bank loan on the property and other payments, Property & Building will receive cash flow of some $343 million (NIS 1.1 billion).

On September 30, the value of the building on the books of Property & Building was $864 million. Taking into account selling expenses, the company will post a net loss on the sale of $45 million. It will receive an estimated $7 million revenue from the building for the period between the signing of the deal and completion.

Innovo Property Group deals in acquisition and management of assets in the greater New York metropolitan area.

Published by Globes, Israel business news - en.globes.co.il - on December 5, 2021.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.

HSBC Tower, Manhattan  credit: Shutterstock, Roman Tiraspolsky
HSBC Tower, Manhattan credit: Shutterstock, Roman Tiraspolsky
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018