Savanna is the latest office owner to hand keys back to a lender.
The New York-based firm signed over its 135,000-square-foot building at 1825 Park Avenue in Harlem to its lender TPG Real Estate Finance Trust for a deed in lieu of foreclosure, according to property records and a source familiar with the transaction.
TPG, which provided $54 million in loans to refinance the property in 2019, likely concluded the property today is not worth more than its debt.
Neither Savanna nor TPG responded to a request for comment.
Savanna joins Blackstone, Brookfield and RXR, and other office owners who have relinquished properties to their lenders. There are few, if any, office buyers in the market and refinancing is tough because of higher interest rates and lower valuations.
Savanna, headed by Christopher Schlank and Nicholas Bienstock, bought the building in 2015 for $48 million.
The investment firm put the property on the market in 2021, hoping to get $75 million or $555 per square foot. Tenants included Beth Israel Medical Center and the Metropolitan Transportation Authority. It later sought to refinance, but was unsuccessful.
Savanna, like other office owners, has faced distress across some of its portfolio. Earlier this summer it transferred a 40 percent stake in 110 William Street to its partner at the 31-story office building after the building’s loan went into default and was extended. The firm negotiated loan extensions at other office towers, including 521 Fifth and the Falchi Building at 31-00 47th Avenue in Long Island City.
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