SL Green has acquired its next major development project, a Midtown Manhattan office tower at 245 Park Avenue. Getting the deal done, though, involved settling a long-running legal dispute with HNA Group, a Chinese property firm that has declared bankruptcy. SL Green announced the acquisition of the 44-story, Class A 1.8 million square foot property recently, and it said it’s still pursuing a $185 million arbitration award from HNA Group.
Harrison Sitomer, SL Green’s chief investment officer, said 245 Park Avenue would follow the likes of One Vanderbilt and One Madison as the firm’s next major project. SL Green had to go through an acrimonious dispute with HNA to acquire the office tower. Earlier this summer, a judge awarded SL Green a $185 million arbitration award from HNA because the Chinese firm allegedly breached the terms of the investment and guarantee.
SL Green obtained a temporary restraining order this summer that prevents HNA from selling its assets until SL Green receives the arbitration award. The legal dispute started when HNA affiliate PWM Property Management accused SL Green of failing to find a new anchor tenant to replace Major League Baseball, though an arbitrator said HNA couldn’t prove it. HNA’s affiliate alleged SL Green tried to put the property in dire financial straits, and they’d benefit from doing so because of their interest in the building and the possibility of foreclosure.
SL Green had invested $148 million in the tower in 2018 and became the property manager. HNA’s affiliate filed for bankruptcy last year and pushed SL Green out as property manager in December 2021, and a bankruptcy judge ruled in favor of the HNA affiliate. For the time being, it looks like the legal saga is over, and SL Green has its hands on a new trophy office building.