Savanna and its Hong Kong-based investment partner Atom Assets are using a $40.4 million loan from United Overseas Bank to fund their purchase of America Media’s longtime office at 106 West 56th Street, Commercial Observer has learned.
JLL Managing Director Kellogg Gaines and Vice President Aaron Niedermayer arranged the financing, which is covering the acquisition and predevelopment costs on the property. Both the sale and financing closed on Feb. 12, according to representatives for JLL and Savanna. A spokesman for the borrower declined to provide the sale price.
“This financing will allow Savanna and Atom Assets to develop a state-of-the-art trophy quality, 90,000-square-foot Class A office asset in a prime Midtown location just blocks from ‘Billionaire’s Row,’” Mr. Gaines said in prepared remarks provided to CO.
The buyers plan to demolish the existing 36,000-square-foot structure between Avenue of the Americas and Seventh Avenue, which houses the Catholic-focused news publication, and build a 90,000-square-foot office building in its place, according to a press release from Savanna. The redevelopment is slated for completion in 2019. The partnership tapped architecture firm Perkins Eastman to work on the project.
“With Central Park views on the upper floors, outdoor terraces, high-end office finishes and luxury amenities, 106 West 56th Street will cater to the types of tenants who seek boutique, trophy office space in Midtown including hedge funds, family offices and high net worth individuals,” Mr. Niedermayer said.
“The building’s small floor plates and attractive amenities will make it a standout property in Midtown, where this type of Class A trophy quality boutique office space is in high demand with very little supply,” Andrew Kurd, a vice president at Savanna, said in prepared remarks.
Commercial development has been popping up in Midtown, especially between West 55th and West 57th Streets. Extell Development Company is building the mixed-use Central Park Tower at 225 West 57th Street between Seventh Avenue and Broadway, which will have a 400,000-square-foot Nordstrom at the base of the building. And in 2013, Boston Properties opened a 1.1-million-square-foot office tower at 250 West 55th Street between Seventh Avenue and Broadway.
Tim Sheehan, Dan Kaplan, Ned Midgley and Stuart Eisenkraft of CBRE represented America Media in the sale. The brokers declined to comment via a spokeswoman. Savanna only had legal representation in the transaction.
America Media, which notably last year did a Q&A with Vice President Joe Biden following his son’s sudden death, will stay in the building for the next year as it plans to find a new home in the city, the release from Savanna indicates. The religious media company, which has been based in New York City for more than 100 years, has owned the building since 1962.
Proceeds from the sale will help fund the company’s existing operations, as well as expand its platforms, Father Matt Malone, the publisher and editor-in-chief of America magazine, said in a post on the company’s website. A representative for America Media did not return a request for comment.
“This transaction achieves three goals,” Mr. Malone said in a statement online. “First, in a rapidly changing publishing environment, the sale will provide baseline financial security for the future. Second, the transaction will give America Media the resources to continue the multi-platform expansion of our media ministry, including the redesign of existing platforms and the launch of new digital products and video. Lastly, the transaction will allow us to create a modern facility to house our operations, one more suited to a 21st century media ministry.”
A representative for United Overseas Bank did not immediately respond to inquiries for comment.