Savanna Fund II REIT Sells Manhattan’s 5 Hanover Sq. for $104M
- Aug 26, 2013
CIM Group has acquired 5 Hanover Square, a 25-story building in Manhattan’s Financial District, from Savanna Fund II REIT for $104 million.
The 25-story building, located on the northern side of Hanover Square between Pearl and Beaver streets, has approximately 330,000 square feet, including around 7,500 square feet of retail on the ground floor. Savanna obtained control of the building after it purchased the mortgage on the property during the economic downturn.
This was the second transaction between the two companies this summer, as Savanna sold 2 Rector St., a 26-story office property and 466,000 square feet of rentable space, to CIM Group and Kushner Cos. back in June for $140 million.
For the new deal, Savanna was advised by the New York team of the Hunton & Williams real estate practice group.
“Savanna has made a substantial investment in downtown Manhattan, including 5 Hanover, which is an investment very typical of Savanna’s focus over the last two years,” Carl Schwartz, co-chair of Hunton & Williams’ real estate practice, told Commercial Property Executive. “Savanna completed its leasing and capital improvement programs resulting in a stabilized asset both from a capital and leasing perspective.”
When Savanna first acquired the building, occupancy was 70 percent and through a marketing and leasing program, along with a $7 million capital improvement program, which included two new chillers, a new cooling tower, a facade restoration, new roofing, an elevator modernization, and new bathrooms and corridors, occupancy increased to its current level of 96 percent.
According to Schwartz, Savanna analyzed the downtown market and current trends and believed this was the right time to sell, and the sale resulted in a great return for both Savanna and its investors.
The New York-based Hunton & Williams team was led by Schwartz, partner Laurie Grasso, and Susan Saslow. Frank Cento, Jonathan Fein, and Carlos Suarez of Cushman & Wakefield served as Savanna’s leasing agent.