Buyer for the 865,000-square-foot office tower was 452 Fifth Owners LLC, a special-purpose vehicle held equally by Property and Building Corporation Ltd. and Koor Industries Ltd. The two companies are controlled by Tel Aviv-based IDB Group. The SPV's local partner is Joe Cayre, chairman of Midtown Equities, who says in a statement that he looks forward to doing more deals with IDB.
Under the terms of the agreement, HSBC Bank USA is leasing the entire building for one year, and floors one through 11 for 10 years, the company says in a release. The headquarters of HSBC Bank USA will remain in New York.
Published reports say HSBC is also weighing offers on its 1.1-million-square-foot world headquarters at Canary Wharf in London, as well as an office building in Paris. However, a company spokesman told the Wall Street Journal that "the sale of the New York office was carried out as part of an active property management program, and not to raise capital." HSBC bought the Canary Wharf tower back from Metrovacesa SA last November for GBP838 million after selling it to the Spanish-based developer for GBP1.09 billion 17 months earlier.
Dan Fasulo, managing director of Real Capital Analytics, tells GlobeSt.com he will need more information on the deal before commenting. Based on a statement from IDB, "the NOI was $26.5 million, making the cap rate 8.0%." Fasulo says. "But I need to know if this figure is based on a fully leased building or just HSBC's 550,000-square-foot lease, which would leave the building 36% vacant."
The HSBC deal provides further evidence that overseas investors are shopping in New York City again. It follows the August sale of a partial interest in S.L. Green Realty Corp.'s 485 Lexington Ave. to a joint venture of Israel-based Optibase and Gilmor USA LLC and the $140-million sale of AIG headquarters at 70 Pine St. and 72 Wall St. to a partnership of locally-based Youngwoo & Associates and Kumho Investment Bank of Korea in June.
The 29-story 452 Fifth was formerly the headquarters of Republic National Bank, and became the base of HSBC's US operations when it acquired Republic for $10.3 billion in 1999. It's adjoined to the landmarked One W. 39th St.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
