Capstone, AmTrust Set to Buy Savanna’s 360 Lexington Avenue at $115M Discount
By Isabelle Durso September 11, 2024 1:53 pm
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Private equity firm Capstone Equities and property management company AmTrust RE are set to buy Savanna’s office building at 360 Lexington Avenue at a steep discount, after the property previously saw slow leasing and a foreclosure from its lenders.
The firms are in contract to purchase the office property for $65 million, a source with knowledge of the deal told Commercial Observer. That’s 64 percent down from the $180 million Savanna paid to AEW Partners for the 24-story building in 2019, and the severe haircut is largely due to higher interest rates and post-pandemic hurdles Savanna faced.
Capstone and AmTrust intend to keep the property as an office building for now, the source said.
Savanna declined to comment, while spokespeople for Capstone and AmTrust did not immediately respond to requests for comment. The Real Deal first reported the sale.
Newmark (NMRK)’s Adam Spies, Adam Doneger, Joshua King and Marcella Fasulo negotiated the deal for both parties and declined to comment.
Savanna’s lenders, Barclays (BCS) and PPM America, provided a $110 million loan on 360 Lexington Avenue in 2019 but put the building up for sale in April after foreclosing on the property earlier this year, CO previously reported.
The 268,554-square-foot Midtown office building near Grand Central Terminal is now 60 percent leased, with its largest tenant — Webster Bank — occupying only about 30,000 square feet, as CO previously reported. The Connecticut-based bank signed a 10-year lease at the property in March 2022.
But more recently, Kenneth Park Architects decided in June to keep its 15,379-square-foot office at the building for seven more years.
Still, slow leasing caused problems for Savanna, which has been forced to consider handing over some of its office buildings, including its major properties at 521 Fifth Avenue near Bryant Park and 24-28 West 25th Street in the Flatiron District.
And just last year, Savanna had to surrender its office building at 1825 Park Avenue in Harlem to its lenders, TRD reported.
Isabelle Durso can be reached at idurso@commercialobserver.com.
