Pacific Oak Capital, Savanna default on 110 William Street

Lender talking loan extension after slew of tenants depart

Pacific Oak’s Keith Hall and Savanna’s Christoper Schlank with 110 William Street
Pacific Oak’s Keith Hall and Savanna’s Christoper Schlank with 110 William Street (Loopnet, Pacific Oak)

A Lower Manhattan office building that has lost several notable tenants in recent years is in financial distress.

Pacific Oak Capital and Savanna have defaulted on their loan for 110 William Street in the Financial District, Pacific Oak said in an SEC filing Wednesday. The California-based real estate investment firm was notified of the default in June by a lender, which was not identified in the filing.

However, Invesco Real Estate provided Pacific Oak and Savanna with a $349 million refi for the building in 2019, Commercial Observer reported.

Loan extension talks between Pacific Oak, Savanna and lenders are ongoing, according to the SEC filing. Pacific Oak owns a 60 percent stake in the 32-story, 928,000-square-foot tower.
Neither Pacific Oak nor Savanna responded to requests for comment.

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The Invesco loan refinanced a $265 million loan package provided by Morgan Stanley in 2017. Invesco also had yet to respond when reached for comment.

KBS Capital Advisors and Savanna bought the property from Swig Equities and the Dubai Investment Group for $261 million in 2014. The tandem then went about renovating the building.

Pacific Oak, which was founded in 2018 by KBS co-founders Keith Hall and Peter McMillian, began managing a trio of KBS-established REITs in 2019.

Pacific Oak and Savanna’s loan default on 110 William Street comes as the building has experienced notable tenant turnover in recent years.

The New York City Economic Development Corporation, which had occupied nearly a third of the building’s square footage, relocated down the street to One Liberty Plaza at 165 Broadway, according to the agency’s website. The advertising company Constellation Agency left for space around the block at One World Trade Center, and the New York City Housing Development Corporation is set to move to 120 Broadway.

The flexible workspace provider Knotel occupied as much as 117,000 square feet across three floors at 110 William Street in 2019, when the company more than tripled its footprint from the 36,000 square feet it initially signed for in 2018. Knotel filed for bankruptcy last year and was bought by Newmark.