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$350M Tower Deal Wraps up

NEW YORK CITY-A $210-million financing on the sale-leaseback of the HSBC tower at 452 Fifth Ave., and the deal itself, have closed, GlobeSt.com has exclusively learned.

By Paul Bubny | Updated on April 14, 2010

NEW YORK CITY-A special purpose vehicle has completed what is reportedly Manhattan’s first major non-distressed office deal in two years, the $350-million sale-leaseback of the HSBC tower at 452 Fifth Ave. A $210-million financing from Bank Leumi USA, and the purchase itself, closed Tuesday afternoon, GlobeSt.com has learned.

“This transaction would be notable in any market, but represents a particularly good sign in light of the real estate world of 2010,” says Carl Schwartz, chair of Herrick Feinstein’s commercial real estate department. Schwartz represented Bank Leumi with Herrick partner Jeffrey Kaufman and associate Jonathan Kramer. Bank Leumi Le-Israel B.M. took a participation interest in Bank Leumi USA’s loan.

The SPV, 452 Fifth Owners LLC, involves a partnership of Koor Industries Ltd., and Property and Building Ltd.—both subsidiaries of Israel-based IDB Holding Corp. Ltd., controlled by Nochi Dankner—and locally-based Joseph Cayre’s Midtown Holdings. The two IDB subsidiaries each put up $52.5 million as collateral. GlobeSt.com first reported on the deal last October.

In Schwartz’s view, the deal is notable not so much because it is the first nine-figure office sale in some time that didn’t involve some element of distress, but because transactions of any caliber have been so seldom seen—and it doesn’t have to be that way. “My sense is that there are lenders out there who want to put money out for the right deal,” he tells GlobeSt.com. “The parameters may have changed, but there are banks out there that are in the lending business, and Leumi is one of them.”

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