Savanna's $242M Bryant Park Office Loan Sent To Special Servicing Following Default
Savanna’s $242M loan backed by a Bryant Park office building has been sent to special servicing as the office investor faces other distress across its portfolio.
Savanna defaulted on the loan last month following its June 9 maturity date, despite being current in prior months, according to commentary on Morningstar Credit’s platform. Savanna tried to negotiate an extension until June 2026 as the maturity date approached, but it had already been granted three previous extensions as outlined in the original loan agreement, servicer notes indicatee.
The office at 521 Fifth Ave. has exhibited other signs of distress.
Occupancy at the now-beleaguered 500K SF building slid from 93% when the loan originated in 2019 to 74% at the end of 2023. The reported cash flow for 2023 fell 36% below the underwritten level, pushing the debt service coverage ratio, a metric used to assess a borrower's ability to cover debt obligations, below breakeven.
The lender is in discussions with Savanna about a potential maturity extension, according to servicer commentary. As those discussions continue, local counsel has been retained and default notices have been sent, the commentary says.
Tenants in the 39-story property include Urban Outfitters, Equinox, investment bank Laidlaw Holdings and Newmark’s RKF Retail Holdings, according to Morningstar.
Savanna has struggled with other buildings, including 110 William St. Last year, the joint venture behind the Financial District office building restructured its debt after defaulting on a $349M loan. That included Savanna reducing its ownership interest to zero.
In December, it also lost control of 1825 Park Ave. in Harlem. Savanna handed those keys to its lender, TPG Real Estate Finance, which provided $54M to refinance the property in 2019, The Real Deal reported at the time.
However, Savanna did secure an $880M recapitalization at One Court Square in Long Island City in 2020.
The 1.5M SF tower was fully occupied by Citibank before its 15-year lease expired in 2020, according to commentary on Morningstar. Savanna expected to fill the space with Amazon, but the e-commerce giant backed out of its plans to expand in the area.
Savanna has since embarked on an improvement campaign for the tower. As of 2023, it was about 60% occupied, including Target’s 31K SF store in the area, Commercial Observer reported.
Savanna declined Bisnow’s request for comment.
