Savanna is pouncing on yet another discounted office deal, even as the company works through its own distress issues.
Nicholas Bienstock and Christopher Schlank’s company is in contract to buy the leasehold on Westbrook Partners’ 444 Madison Avenue for $50 million, The Real Deal has learned.
Westbrook, which bought the lease on the 1930s-era office building for $314 million in 2007, defaulted on its Wells Fargo $120 million loan. The bank put the loan up for sale late last year in an offering that would have given a buyer a direct path to taking over the property through a deed-in-lieu of foreclosure.
But in the end, Wells arranged a deal to sell the property outright and accept a discounted payoff through a short sale.
Representatives for Savanna, Wells Fargo and Westbrook did not immediately respond to requests for comment.
A Newmark team led by Adam Spies and Adam Doneger negotiated the sale.
This is the third office property Savanna has snapped up in the past nine months — making it one of the more opportunistic buyers in New York despite its existing portfolio having its own share of problems.
In February, the company bought the leasehold on 430 West 15th Street in the Meatpacking District for $85 million — a sharp discount to the $159 million that Invesco had paid for the property in 2018.
And last November, Savanna bought the newly constructed office building at 799 Broadway for $255 million, after owner Columbia Property Trust had defaulted on its $270 million mortgage.
The roughly 470,000-square-foot office building at 444 Madison Avenue is about half empty. The ground lease can be extended by 63 years to 2089,and Savanna will be able to try to renegotiate the terms with the owner of the land underneath, the Kandel family.
Savanna is partnering with Summit Properties on the acquisition.
After pandemic shutdowns cleared out office buildings, the asset class became a red line for many investors. But in the past year or so, opportunistic buyers have been coming back to the market — characterizing it as a once-in-a-cycle opportunity to scoop up distressed properties at attractive values last seen following the great recession.
As Savanna has eyed new buying deals, it’s also working through its own distress.
The company earlier this summer missed a critical loan payment on its $463 million CMBS mortgage at 5 Bryant Park. And last month, it lost its new office development at 141 Willoughby Street in Downtown Brooklyn to foreclosure.
Read more
Bargain-hunting Savanna picks up Invesco’s 430 West 15th for $85M
Savanna buys Columbia Property Trust’s distressed 799 Broadway
“No one is immune”: Savanna dragged down by office market
