Savanna Seals $381M 521 Fifth Avenue Buy With $242M Deutsche Bank Loan
Savanna has officially closed on its $381 million acquisition of 521 Fifth Avenue, sources close to the deal told Commercial Observer.
Deutsche Bank provided a $242 million loan in the transaction, which closed earlier this week.
CBRE’s Darcy Stacom, William Shanahan, David Fowler and Doug Middleton represented the seller—a joint venture of SL Green (SLG) Realty Corp. and Plaza Global Real Estate Partners—in the deal, while CBRE’s Tom Traynor, James Millon and Ethan Gottlieb arranged the financing.
Savanna is planning a transformative capital improvement and leasing campaign at the 499,000-square-foot, 39-story Class-A office and retail tower, which sits on the corner of 43rd Street and Fifth Avenue. Those upgrades include a complete entrance and lobby renovation, new signage, systems upgrades and other redesigns throughout the building.
“521 Fifth Avenue’s location a block from Grand Central makes it a perfect fit for our growing Midtown office portfolio,” Andrew Fichte, a managing director of Savanna, said in prepared remarks. “After we make a few select cosmetic improvements, including a lobby renovation, we believe this property will be well-positioned for a successful leasing campaign.”
A team led by CBRE’s Peter Turchin and David Hollander has been engaged as the exclusive leasing agent.
Built in 1929, 521 Fifth Avenue is currently over 96 percent leased, with office tenants that include China Trust Commercial Bank and Berkadia Real Estate Advisors. Urban Outfitters and Equinox are the street-level retail tenants in the building. The property offers flexible floor plates from 22,000 square feet at the base to 6,580 square feet in the tower.
SL Green bought the asset in 2011 for $225 million, and in December 2012, it sold a 49.5 percent minority stake in the property to Plaza Global Real Estate Partners—a joint venture between LaSalle Investment Management and Quantum Global Real Estate. The landlord announced that it would be selling the asset to help fund its stock buyback program in its fourth quarter earnings call in January 2018, and 521 Fifth Avenue was put on the market shortly thereafter.
“We had a lot of people that were bidding on it, but Savanna wanted to acquire the asset and came after it hard,” Stacom told CO in a March interview, when Savanna was announced as the winning bidder.
Officials at Deutsche Bank declined to comment.