One Court Square recapitalized in $880M deal
Savanna had been struggling to find a lender ahead of 2020 deadline
UPDATE Tuesday, January 7, 2020, 10:49 a.m.: Savanna’s One Court Square appears to be back on stable ground — at least compared to a year ago.
The investment manager finalized a $880 million recapitalization at its 1.5 million-square-foot tower in Long Island City on Friday, according to Commercial Observer.
Savanna scored a $580 million senior loan from funds managed by Apollo Global Management and $100 million of subordinate debt SL Green Realty. To cap it off, Junius Real Estate Partners provided $200 million, converting its ownership position into a preferred equity stake, the report said.
The recapitalization comes as a $315 million commercial-mortgage-backed-securities loan originated by French investment bank Natixis was set to mature in fall 2020.
JLL’s Kellogg Gaines, Aaron Niedermayer and Brian Buglione negotiated the debt for Savanna. Cushman & Wakefield’s Adam Spies, Doug Harmon, Marcella Fasulo, Adam Doneger and Josh King handled the equity portion of the deal along with the investment bank PJT Park Hill.
Savanna was left with a 1 million-square-foot hole in its rent roll in LIC nearly a year ago after Amazon backed out of its plans to build a second headquarters in New York City. The building’s largest tenant, Citigroup, along with others, had been scheduled to move out to make way for the e-commerce giant.
After Amazon’s decision to pull out of LIC in the wake of political headwinds, Savanna’s efforts to sell stakes or find lenders reportedly ground to a halt. At the time, Marx Realty’s Craig Deitelzweig said for the investment manager, co-partnered by Christopher Schlank and Nicholas Bienstock, profitability on the deal relied on finding an Amazon-level tenant.
A month later, the firm was in talks to fill 500,000 square feet with healthcare company Centene Corporation. And in June Savanna inked a lease with telecom and cable firm Altice USA for 103,000 square feet. Altice had previously subleased its space at One Court Square from Citigroup.
Schlank, speaking on a panel last March, blamed Governor Andrew Cuomo’s “hubris” and Mayor Bill de Blasio’s “weakness” for Amazon ditching New York.
“It’s going to take a very long time to repair the damage,” he said at the time. [CO] –Erin Hudson
Update: JLL confirmed three of its brokers who worked on the debt transaction.