Savanna Closes on $104M Downtown Tower Sale

NEW YORK CITY-A note acquisition three years ago as the market was still recovering from the downturn has led to an office-property sale and a nice profit. Savanna, which acquired the mortgage on 5 Hanover Square for $51.5 million in 2010, has now closed on the sale of the 25-story office property to CIM Group for $104 million, an amount that exceeds the sub-$100-million industry estimate quoted by Crain's New York Business when the property went to market this past May.

The sale, brokered by Doug Harmon and Adam Spies of Eastdil Secured, marks the second time in three months that Savanna has sold a Lower Manhattan office asset to Los Angeles-based CIM. In June, a partnership of CIM and the Kushner Cos. acquired Two Rector Street from Savanna and Stellar Management. The price was $140 million for the 466,000-square-foot tower, according to industry data, in line with the pricing per square foot on 5 Hanover.

Located on the northern side of Hanover Square between Pearl and Beaver streets in the Financial District, 5 Hanover contains approximately 330,000 square feet, including about 7,500 square feet of ground-floor retail. It was built in 1962 and renovated in '10.

According to Crain's, Savanna took a $47-million loan against the property after acquiring the note, borrowing from Mesa West Capital for capital improvements. The previous ownership, Swig Equities, remained as leasing agent following Savanna's acquisition of the debt. The property is now about 95% occupied, according to industry data, and a spokeswoman for Savanna attributes the property's leasing success in part to a Cushman & Wakefield team that includes Frank Centro, Jonathan Fein and Carlos Suarez.

The real estate practice group of Hunton & Williams LLP, which announced the sale's closing Thursday, represented Savanna Fund II REIT in the sale. Carl Schwartz, co-chair of the firm's real estate practice, partner Laurie Grasso and Susan Saslow provided legal counsel on the deal.