NEW YORK CITY-Savanna Investment Management LLC has acquired $120 million in debt on seven office, residential and retail properties throughout Manhattan, Long Island and Connecticut. The New York City-based real estate and development firm purchased the loans from four major Wall Street banks at discounts of up to 30%. A Savanna source tells GlobeSt.com that the company will not divulge exact locations of the properties at this time.

The transactions through the $313-million Savanna Real Estate Fund I, continue to advance the firm’s opportunistic private equity investment strategy designed to take advantage of the credit crisis dislocation by acquiring subordinate bank notes. “While there are literally hundreds of potential debt deals to pursue in this climate, we have carefully picked a handful of notes secured by the kind of real estate we typically buy, own and operate,” says Nick Bienstock, a managing partner with Savanna. “Our objective with these types of investments is to generate equity-like return with substantially less risk. Our experience as a development company gives us the security of recognizing the true value of these assets.”

The Savanna source tells GlobeSt.com that the firm believes that credit for commercial real estate transactions will become increasingly scarce in the near-term, which will lead to additional debt buying opportunities for two reasons. “One main reason has to do with the ‘legacy/pre-crunch’ loans that banks are still holding,” the source says. “In particular, there are a few large investment banks who have not sold a lot of debt since last August whereas other banks were pushing hard to move debt off of their books by year-end 2007. One of the reasons that some banks held onto debt while others sold is that different banks are regulated differently, and the commercial banks were forced to recognize problems sooner than some of the investment banks. Another reason some banks held onto their debt is that they simply thought things would get better and that they had the staying power to wait until the credit markets improved, which has turned out not to be true.” The source continues that “our sense is that the banks that held onto loans with the hope that things would get better–i.e. credit would become more readily available–are now realizing that this is not the case, and are now looking to sell because they are getting capital calls from their line providers.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.