Savanna Misses Critical Loan Payment at 5 Bryant Park

Savanna is running out of options at a Midtown office tower.

The real estate investment firm missed a required balloon payment on a $463 million CMBS loan tied to 5 Bryant Park, Bisnow reported. The loan backing the office building matured last month, according to a report from CRED iQ.

Savanna acquired the 34-story property from Blackstone in 2018 for $640 million. The firm took out a loan to finance the acquisition, set to mature in June 2020. The loan included five one-year extensions, each one of which has since been exercised, leaving Savanna, quite literally, out of options.

As of the end of March, the 683,000-square-foot building was 81 percent occupied, according to service commentary on Morningstar. Since the debt underwriting, however, net cash flow has dropped more than 20 percent. The debt is underwater as interest payments and operating expenses have jumped in the intervening years.

The loan was put on a watchlist due to the decrease in net operating income. Savanna was hoping to achieve a refinancing deal within 90 days, according to service commentary from last month.

The firm did not respond to Bisnow’s request for comment prior to publication.

Elsewhere, Savanna is facing foreclosure on a Downtown Brooklyn Class A office tower. Last month, Capstone Equities initiated a U.C.C. foreclosure for the equity interests in a Savanna-linked company that controls the 24-story office at 141 Willoughby Street.

Savanna has faced losses on its office properties because of higher interest rates. Last year, it sold 360 Lexington Avenue for $65 million, a deep discount from the $180 million Savanna paid to purchase the 270,000-square-foot office and retail property in 2019. Savanna also faced foreclosure at 521 Fifth Avenue, a 39-story, 460,000-square-foot office tower. 

Yet Savanna continues to buy deeply discounted office buildings, too. It purchased 430 West 15th Street in the Meatpacking District for $85 million last year.

— Holden Walter-Warner

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