The Real Deal New York

Savanna to pay $58M for retail space at 40 Mercer in Soho: sources

May 23, 2012 12:00PM
By Adam Pincus

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From left: Christopher Schlank and Nicholas Bienstock, co-managing partners at Savanna, and 40 Mercer Street

The Midtown-based real estate investment firm Savanna is showing a voracious appetite for acquisitions in New York City and now is in contract to buy the retail condominiums at the base of the mixed-use Jean Nouvel-designed building at 40 Mercer Street for about $57.5 million, multiple industry sources said.

Savanna signed the contract late last week with owner GLL Real Estate Partners for the five retail condos, which have an address of 465 Broadway, sources familiar with the deal said. Representatives from Savanna and GLL declined to comment.

That price is 37 percent higher than the $41.9 million that GLL, a global real estate investment fund based in Munich, Germany, paid for the retail asset in April 2010, city property records show.

Hines Interests and Andre Balazs developed the 13-story luxury Soho tower, which opened in 2006.

A Studley team led by investment brokers Woody Heller and Will Silverman — which represented Hines and Balazs when they sold to GLL — represented Savanna in this sale, according to sources. Heller and Silverman declined to comment.

While Savanna, led by co-managing partners Christopher Schlank and Nicholas Bienstock, focuses on underperforming office properties, it has been buying retail as well. This year, it paid $57 million for a 150,000 square foot office and retail condo at 15 East 26th Street, between Fifth and Madison avenues.

The combined units have 9,400 square feet on the ground floor, and 14,000 square feet of selling space, figures from data firm CoStar show, giving it a price of $4,100 per square foot.

Robert K. Futterman, CEO of Robert K. Futterman & Associates, who was not involved in the transaction, said the strong market in Soho justified the increase in value.

“It’s quality real estate on a prime corner in a rising market,” he said.

Retail tenants in the space include the high-end audio store Bose and bank Wells Fargo.

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