Savanna Snaps Up Columbia Property Trust’s 799 Broadway for $255M
By Cathy Cunningham November 19, 2024 12:17 pm
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There’s been plenty of negative office headlines of late, but an office sale just closed that proves it isn’t all doom and gloom out there — and dollars do exist for the right product.
Columbia Property Trust and Cannon Hill just sold their trophy office property at 799 Broadway for $255 million to Savanna, Commercial Observer has learned.
The $266 million debt on the 177,000-square-foot property, provided by Blackstone Mortgage Trust (BXMT) in 2022, is above the sale price, and the lender therefore directed the sale, sources said.
“This is a great outcome for our investors and delivers on our strategic priority to resolve impaired assets above our carrying values,” a BXMT spokesperson told CO.
Indeed, at $255 million, the sales price reflects only a very small loss of 4 percent, compared to the bulk of office trades — happening at high discounts — today.
Eastdil Secured’s Gary Phillips and Will Silverman negotiated the transaction, which closed Nov. 19.
The sale — which closed at a high 4 percent in-place cap rate — also shows increasing market liquidity for differentiated, high-quality office, attributes that first drew Blackstone to the financing in 2022. That same year, also in that theme, a Blackstone-led consortium financed 425 Park Avenue with a $911 million loan.
In August, The Real Deal reported that Columbia Property Trust was exploring a short sale of the property.
799 Broadway sits at the corner of Broadway and East 11th Street, three blocks south of Union Square. The firm developed the building, acquired the site in 2018 and completed construction in April 2022. Today, the building is 70 percent leased to tenants including Wellington Management and Bain Capital Ventures.
With this transaction closed, BXMT is on track in the coming quarters to resolve over half of the $2.3 billion of impaired loans it carried at the end of the third quarter, a source said.
And the deal marks a new purchase for Savanna, which has been facing distress for other office properties it owns around Manhattan. In August, the $200 million note on Savanna’s 1375 Broadway was bought by Sentry Realty, which will take over ownership while Savanna continues to operate the property, as CO previously reported.
Also in August, Savanna had its $232 million commercial mortgage-backed securities loan on 521 Fifth Avenue sent to special servicing while its lenders forced it to put up 360 Lexington Avenue for auction in April and they defaulted on Savanna’s $110 million loan on the property.
Officials at Columbia Property Trust and Savanna did not immediately respond to a request for comment. Eastdil Secured declined to comment.
Cathy Cunningham can be reached at ccunningham@commercialobserver.com.
