Brookfield, NYSTRS to sell NYC office for $2.2bn

The Toronto-based alternative asset manager and New York pension fund are selling the 45-story building to a joint venture led by China’s HNA Group.

Brookfield Asset Management and the New York State Teachers’ Retirement System are selling 245 Park Avenue, a 45-story office tower in New York City, to a joint venture led by China’s HNA Group for $2.2 billion, PERE has learned.

A spokesman for Toronto-based Brookfield declined to comment and the other groups could not be reached. PERE understands that the Chinese conglomerate has at least one other partner in the deal.

Brookfield purchased 245 Park Avenue with balance sheet capital in 1996 as part of its takeover of Olympia & York Developments, a Canadian real estate firm that went bankrupt. The New York State Teachers’ Retirement System bought a 49 percent stake in the Class A building for $438 million in August 2003, valuing the tower at $894 million, according to data provider Real Capital Analytics.

The 1.8 million square foot building, constructed in 1967, includes 68,000 square feet of retail space. Its anchor tenant is French bank Société Générale, which is leasing the space from JPMorgan.

Haikou, China-based HNA is expanding its Manhattan footprint with the deal. Its last publicly-disclosed New York transaction was the April 2016 JV with MHP Real Estate Services to acquire 850 Third Avenue. HNA owns a 90 percent stake in the 21-story building that was purchased for $463 million from Shorenstein Properties, PERE previously reported. In October, the company acquired a 25 percent equity stake in Hilton Worldwide Holdings from Blackstone in a transaction valued at $6.5 billion.

HNA was founded as an aviation company in 1993 and has since diversified into hospitality, technology and other industries. The company’s first real estate investment was the acquisition of three Belgian hotels for $51 million in September 2007, according to RCA.