The Real Deal New York

Savanna struggling to recapitalize emptyting LIC office tower: report

No Amazon HQ means a 1 million-square-foot liability at One Court Square
February 21, 2019 11:10AM

Savanna’s Chris Schlank and One Court Square in Long Island City (Credit: Getty Images and Wikipedia)

One Court Square landlord Savanna can’t refinance the Long Island City office tower after losing a 1 million-square-foot tenant in Amazon.

The Wall Street Journal reported that the company’s talks to either borrow more money or sell stakes in the property are now dead, as any deal had been contingent on Amazon moving workers into One Court Square as part of its new campus in Long Island City.

As The Real Deal reported previously, Amazon pulled out of a preliminary deal to build its so-called “HQ2” after mounting opposition from city officials and Queens residents.

Savanna’s loan for One Court Square matures in 2020, just as CitiGroup is scheduled to leave the 1 million square feet of space reserved for Amazon, leaving the building 70 percent vacant. The $315 million loan balance could go into default if Savanna can’t work something out by then, the Journal reported.

But Savanna was counting on an Amazon-level tenant to make its 2014 venture to buy the property profitable in the first place, according to Marx Realty’s Craig Deitelzweig. “A lot of the tenants who were looking at Long Island City were lower-paying tenants, and there weren’t the signature rent tenants that would drive leasing… Amazon was that.” [WSJ] — Will Parker