Oct. 5 (Bloomberg) -- HSBC Holdings Plc, Europe’s largest bank, agreed to sell its New York City headquarters for $330 million in cash to a company controlled by Israeli businessman Nochi Dankner.

The London-based lender will lease back the tower at 452 Fifth Ave., according to company filings. The price comes to about $381 a square foot.

“The fact that an investor is willing to pay all cash for a several hundred million-dollar asset is a very bullish sign for the Midtown office market,” said Dan Fasulo, managing director of New York-based Real Capital Analytics Inc., which tracks commercial property sales worldwide. “At some point these cash deals are going to add up and give investors the confidence to return en masse.”

Commercial property transactions in the U.S. may fall 93 percent this year compared with 2007, according to Real Capital. New York sales through September totaled $1.62 billion, down 95 percent from the same period two years ago, as tight credit and rising unemployment sapped demand.

Cash buyers from other countries who made money outside of real estate are now looking at New York property “as a place to stash that capital,” Fasulo said.

NYC Prices Fall

They’re “targeting commercial real estate as a counter- cyclical play, whether it’s right or not,” he said.

New York office prices have fallen 30 percent to 50 percent compared with their 2007 peak, according to FirstService Williams, a New York-based brokerage.

HSBC is selling some of its landmark office buildings to raise cash. South Korea’s National Pension Service said Sept. 28 it’s interested in HSBC’s headquarters building, 8 Canada Square, in London’s Canary Wharf. The bank has also been marketing its Paris office building at 103 Avenue des Champs Elysees.

HSBC sold the Canary Wharf skyscraper to Spain’s Metrovacesa SA in June 2007 for 1.09 billion pounds ($1.74 billion). The lender then bought the building back in December 2008 for 838 million pounds after the Spanish developer failed to refinance a loan from the bank, making a profit of 250 million pounds.

The bank said in April it may sell three of its landmark buildings. At the time, real estate brokers said the properties might fetch 2.7 billion pounds.

HSBC’s Focus

HSBC said last month that Chief Executive Officer Michael Geoghegan will move to Hong Kong from London as the global bank increases its focus on emerging markets such as China, India and Brazil.

Geoghegan told the Financial Times in an interview published today he expects the economic recovery to be ‘W’ shaped. “I’m not as convinced we’re through the worst as others are,” the FT cited him as saying. HSBC shares gained 3.4 pence to 689.9 pence in London Stock Exchange trading today.

HSBC Bank USA agreed to lease back its entire New York building for one year and floors one to 11 for 10 years, according to the bank’s statement. The transaction is expected to close in the first quarter of 2010.

The 865,000 square foot tower at 452 Fifth is two attached buildings: a 29-story glass and steel tower completed in 1985, and a Beaux Arts structure at its base, a New York City landmark, which was built 1902. The building is one block south of the main building of the New York Public Library.

HSBC agreed on the transaction with 452 Fifth Owners LLC, a company owned by Koor Industries Ltd. and Property & Building Corp., both controlled by Dankner’s IDB Holding Corp.

The Israeli companies announced the deal in a statement to the Tel Aviv Stock Exchange. Koor holds a 1.71 percent stake in Credit Suisse Group AG, and Dankner’s buying and selling of his shares in the Swiss bank has netted the company at least 750 million shekels ($199 million) of profit.

To contact the reporters on this story: Calev Ben-David in Jerusalem at cbendavid@bloomberg.net; David M. Levitt in New York at dlevitt@bloomberg.net

Last Updated: October 5, 2009 12:47 EDT