Savanna, a New York-based real estate investment and private equity firm, has grown to be the city’s second most active acquirer of commercial office buildings post-recession, according to Crain’s, thanks to its strategy of buying up debt on distressed properties and then taking control of the assets once the current owner defaults. Only SL Green Realty has bought up more property since 2009, Real Capital Analytics data shows.
Savanna goes after returns of 20 percent, according to Crain’s, a much larger profit than what the majority of real estate transactions these days regularly provide. The promise of such profits has lured investors, with Savanna raising almost $900 million in funds since 2008.
Savanna has succeeded primarily because of its skill in navigating complex deals, such as at 576 Fifth Avenue where it bought the defaulted mortgage, sources said.
“A lot of buyers say they want these hairy deals, but that’s a lot of hogwash,” said David Schechtman of Eastern Consolidated. “There aren’t a lot of companies that know how to do them.”
Nicholas Bienstock, a partner at Savanna, said a key part of the company’s strategy is to find ways to add value to their assets. The firm is not a passive operator, he said.
“We know how much the bathroom tile costs,” he said.