Savanna is being saddled with more distress in Manhattan’s beleaguered office market.
On Wednesday, Wells Fargo filed a preforeclosure suit against Savanna at 521 Fifth Avenue near Grand Central Terminal, Crain’s reported. The lender is seeing to sell the 39-story, 460,000-square-foot tower to recoup losses at the property.
The bank alleges Savanna is past due on a $242 million loan backed by the property, which features an Urban Outfitters store and Equinox gym, in addition to office space. The loan originally matured in June 2021, according to the suit, but Savanna received three extensions that took the loan through this June.
The loan is part of a commercial mortgage-backed security. Wells Fargo provided the loan to finance Savanna’s purchase of the property from SL Green in 2019; Savanna paid $381 million for the building.
The property is 77 percent occupied, according to a Trepp report. There are at least two floors available for lease, Savanna’s website shows. Equinox, which takes up more than 5 percent of the building’s space, is locked in a lease through 2035.
While Wells Fargo filed its preforeclosure suit, it is also in the process of trying to work out the defaulted loan, which was transferred to special servicing in August.
Savanna did not comment on the lawsuit and has yet to file a response.
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Savanna is one of New York City’s biggest office investors, but has faced issues across its portfolio in recent years, defaulting on debts and scrambling to extend loans. In June 2023, it transferred a 40 percent stake in 110 William Street to its partner.
A couple of months ago, Savanna agreed to sell 360 Lexington Avenue to Joshua Zamir’s Capstone Equities and AmTrust RE for $65 million, roughly a third of what Chris Schlank and Nick Bienstock’s Savanna paid for the 270,000-square-foot office and retail building in 2019.