Nicholas Bienstock and Christopher Schlank

The office market might be down, but it’s not completely out, at least based on Savanna’s leasing activity.

The owner and developer landed around 730,000 square feet of leases in 2022 over its approximately 7 million-square-foot office portfolio, up from the 500,000 square feet in deals it notched in 2021, and Nicholas Bienstock said the firm is “on track” to outpace that leasing volume in 2023. 

In the past 12 months, Savanna also wrapped up roughly 1 million square feet of office and residential ground-up development in New York City and is actively working on 1.6 million square feet of residential projects in West Palm Beach, Fla., Bienstock added. 

Speaking of sunny Florida, Savanna in March 2023 secured $55 million in financing from Madison Realty Capital for its first South Florida venture: a 275-unit, two-tower condominium complex at 1919 North Flagler Drive. Savanna plans to double its West Palm Beach offices in size in 2023 — from 10 staffers to 20 — as the firm’s presence in the state grows. 

“Our Florida business has expanded and is continuing to expand rapidly,” Bienstock said in a statement. “For two decades, South Florida has benefited from population growth, the transfer of wealthy individuals and businesses in search of lower taxes, a more favorable regulatory environment and the climate.”

But things were a bit cloudier for Savanna’s business up north. Savanna and Pacific Oak Capital defaulted on a $349 million loan package for the 32-story office property at 110 William Street in New York City in June, though the duo managed to score three short-term extensions from lender Invesco Real Estate. (Bienstock declined to comment on whether Savanna and Pacific Oak had secured an additional extension for the loan.)

Still, Bienstock was optimistic that the distress in the office market would provide new chances for Savanna to invest in New York City real estate in the next one to three years, similar to how the firm became a distress investor in Gotham following the Global Financial Crisis.

“The extraordinary rise in interest rates and the current liquidity crisis in the debt markets has exacerbated problems in many capital stacks that were already weak,” Bienstock said. “We believe that a deep distress investing opportunity is emerging across many real estate assets, and in New York City office buildings in particular right now.”