HSBC and Israel’s IDB Group have confirmed they have exchanged contracts to carry out a sale and leaseback of the bank’s HQ in New York, USA.
As tipped by Property Week on Friday, this morning HSBC US, a wholly owned subsidiary of HSBC Holdings, said it had agreed to sell and leaseback its building at 452 Fifth Avenue for $330m in cash.
It has been bought by 452 Fifth Owners LLC, a special purpose vehicle established for the transaction, comprising the Tel-Aviv listed IDB Group which will carry out the transaction through its subsidiary companies - Property and Building Ltd and Koor Industries. The special purpose vehicle is also thought to include Joseph Cayre of Midtown Equities.
The complex at 425 Fifth Avenue and 1 West 39th Street consists of two buildings, one 29 stories high and the other 12 stories with a total of 865,000sq ft.
Under the terms of the agreement, HSBC Bank USA has agreed to leaseback the entire building for one year, and floors one to 11 for 10 years.
IDB said it will receive $45m in rental income in the first year while operating expenses will total $18.5m.
The deal is expected to close in the first quarter of 2010.