Israel firm sells HSBC Tower for $855 million

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Israel firm sells HSBC Tower for $855 million

JERUSALEM, Dec 5, Reuters -- Israel's Property and Building Corp said on Sunday it agreed to sell the HSBC Tower building in midtown Manhattan for $855 million to New York-based real estate firm Innovo Property Group, recording a net loss of $45 million.

The Israeli company, which is 63% owned by Discount Investment Corp, sold property in Israel for 390 million shekels $123 million, said management was focused on income-producing properties in Israel and that the amount it received would allow it to advance this policy.

Cohen said that the sale of the HSBC building came despite the gloomy predictions about the U.S. commercial real estate market.

He cited Tivoli Village, an upscale apartment complex in Las Vegas that opened this year, which could be put up for sale as part of the company's efforts to boost liquidity and reduce debt.

In 2009, Koor Industries, Property and Building bought the 30 storey, 80,000 square metre HSBC Tower for $353 million. In 2011 Property acquired Koor's stake in the tower, which has an occupancy of 99%, it said. HSBC had bought the building in the 1990s.

As of Sept. 30, the HSBC Tower's value was $864 million, according to Property and Building. After costs, it said it would record a net loss of $45 million from the sale.

The completion of the sale is expected to be completed by April 1, 2022, subject to Innovo's right to advance the date while also receiving options to postpone the completion twice for 30 days each.

After the sale, the property said it will have a net cash flow of $343 million.

Its shares were 0.7% lower in afternoon trading in Tel Aviv.