Invesco Real Estate has gone from lender to partner at 110 William Street.
The firm’s $87.1 million mezzanine loan has been converted into a 22.5 percent stake in the Financial District property, according to a recent SEC filing. The previous ownership duo of the building, Pacific Oak Capital Advisors and Savanna Real Estate Fund, had been given several three-month extensions after defaulting on its debt in June 2022.
Invesco’s taking an ownership stake comes in a busy summer for 110 William Street, a 32-story, 928,000-square-foot tower. In June, Savanna transferred its 40 percent ownership stake to Pacific Oak, which at that point was the sole owner of the property.
Pacific Oak and KBS Capital Advisors bought 110 William Street in 2014 from Swig Equities and the Dubai Investment Group for $261 million. The group planned a renovation of the property that would make it a Class A office building.
Invesco entered the fray in March 2019 by providing a $349 million, floating-rate loan, a financing package that has no doubt been exposed to rapidly rising interest rates over the past two years. That loan refinanced $265 million in debt provided by Morgan Stanley in March 2017.
In addition to the floating-rate loan, tenant turnover has plagued the building. The New York City Economic Development Corporation left in 2016 for One Liberty Plaza after occupying almost a third of the square footage at 110 William Street. The New York City Housing Development Corporation vacated the property in 2022, and advertiser Constellation Agency left for One World Trade Center in 2021.
But things have started to look up on the leasing front. In tandem with Savanna’s exit in June, an undisclosed city agency agreed to lease 640,000 square feet at 110 William in a 20-year deal. The lease accounts for more than two-thirds of available space. This deal may have made taking an ownership stake more attractive for Invesco.
Upgrading the office building to Class A may have seemed like a luxury when Pacific Oak acquired it in 2014, but after the pandemic ushered in broad adoption work-from-home policies, available Manhattan office space has reached an all-time high.
Invesco declined to comment. Pacific Oak could not be reached for comment.
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