Innovo Buying HSBC Tower at 452 Fifth Avenue for $855M

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Andrew Chung’s Innovo Property Group is buying PBC USA’s 865,000-square-foot building at 452 Fifth Avenue for around $855 million, PBC USA announced Sunday.

The 30-story property — known as HSBC Tower since it houses the bank’s 548,000-square-foot U.S. headquarters — is under contract for a sale expected to close next year, according to the source. Innovo is currently seeking financing for the deal, according to a source with knowledge of the deal.

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The 865,000-square-foot building — which is about 90 percent leased — last traded in 2010, when PBC, the U.S. arm of Israel-based Property & Building Corp., purchased it from HSBC for $330 million. HSBC’s lease, which represents about 60 percent of the building, is scheduled to expire in 2025, after the company renewed in 2017

PBC valued the property at $864 million as of Sept. 30, recording a net loss of $45 million from the sale, Reuters reported.

PBC uses the property between West 39th and West 40th streets as its headquarters and spent more than $80 million renovating the tower’s lobby, elevators and entryway.

PBC plans to offload all of its $2 billion in U.S. real estate. In October, when the company announced its intention to shed all its U.S. property, PBC reportedly expected to sell HSBC Tower, one of its major assets, for at least $850 million, as The Real Deal reported.

Led by CEO Eli Elefant, PBC was looking to sell off most of its U.S. assets as its parent company intends to focus more on investments in Israel and at a time when interest rates and market conditions make a sale favorable to the real estate company, TRD reported. 

Other office tenants at the Midtown South HSBC Tower include law firm Baker McKenzie and investment manager the Man Group.

PBC tapped Eastdil Secured’s Gary Phillips, Will Silverman and Steve Binswanger to market the property. Eastdil, Innovo and PBC declined to comment. Discount Investment Corporation — the parent company of both PBC and Property & Building Corp. — could not be reached for comment.

Celia Young can be reached at cyoung@commercialobserver.com.