What tenants are paying at Chetrit’s 850 Third Ave

first_imgFull Name* Contact Kevin Sun Email Address* Message* Chetrit Group principal Michael Chetrit and 850 Third Avenue (Google Maps)When Chinese airline-turned-conglomerate HNA Group sold the office tower at 850 Third Avenue at a loss early last year, one major motivation was to avoid scrutiny from the U.S. government, which had threatened to seize the property due to national security concerns.The way things turned out, HNA’s disposal of this trophy asset also helped it sidestep a headache involving its biggest tenant, whose lease has ended up in limbo after expiring in the middle of a pandemic.The 21-story, 617,000-square-foot tower’s new owner, the Chetrit Group, is now suing the Discovery Channel for not paying rent, after overstaying the expiry of its lease at the end of May. Discovery had planned to relocate its offices to TF Cornerstone’s 230 Park Avenue South, but coronavirus-related restrictions reportedly delayed the move.Just months before going into contract to sell the Plaza District property, HNA and its partners refinanced it with a $242 million CMBS loan from Natixis, as well as $100 in mezzanine debt from Paramount Group and Harbor Group International. Those CMBS loan documents provide a closer look at the property’s finances.A 2018 prospectus for the loan securitization shows that the property was 89.6-percent leased to 26 office tenants at the time, to tenants in the media, legal, real estate, entertainment, health care, public and boutique financial sectors.Discovery Communications — which also owns HGTV, Food Network, OWN: Oprah Winfrey Network, and other television brands — was the largest tenant, paying about $45 per square foot for its 190,015 square feet, with the option to extend for 10 more years after May 2020.At the time, Discovery had already announced plans to move to 230 PAS, and HNA informed the lender that “the Discovery space has already attracted several interested parties.” Natixis’ loan provided for $15 million in future funding “to fund tenant improvements and leasing commissions for the re-tenanting of this space.”Three of the top five tenants at the property are law firms: Shearman & Sterling, Segal McCambridge, and Kaplan Fox. New York and Presbyterian Hospital leases 30,284 square feet at $49 per square foot.Average rent for the five largest tenants averaged about $48.50 in 2018, while average rent for all tenants was somewhat higher at about $54.50.In New York, HNA still owns another office tower six blocks away at 245 Park Avenue, as well as the hotel portion of the Cassa Hotel and Residences at 70 West 45th Street. HNA chairman Chen Feng was recently banned from flying, taking high-speed trains or going on vacations in China, after being blacklisted for failing to pay off debts.Stacking plan for 850 Third Avenue in 2018 (Source: Trepp)Read moreChetrit battles Discovery Channel at 850 3rd AvenueFacing federal scrutiny, HNA in contract to sell 850 Third AveHNA, partners take financial loss on sale of 850 Third AvenueTRD Insights: What tenants are paying at HNA’s 245 Park Avenuecenter_img Share via Shortlink Share on FacebookShare on TwitterShare on LinkedinShare via Email Share via Shortlink TagsManhattan Office MarketOffice LeasingTRD Insightslast_img read more