Real estate private equity firm realizes profit on 18-month investment

NEW YORK, Nov. 13 /PRNewswire/ -- Savanna Investment Management, LLC, a New York City based real estate investment and development firm, has completed the sale of 63-67 West 38th Street, a 144,000-square-foot office building, with 37,000 square feet of air rights, in Midtown Manhattan. The buyer, a joint venture between two local entrepreneurs, acquired the property in an all cash deal for $29.5 million on October 27, 2009.

Situated on a thru-block parcel on the north side of West 38th Street that connects to the south side of West 39th Street, the 12-story property is zoned for commercial and residential uses as of right. Constructed in 1930 as a commercial loft building, it is presently 15% occupied with one remaining tenant.

Marty and Eric Meyer, a father and son team at FirstService Williams, represented Savanna on this transaction. The brokerage team was selected to market this property based on their expertise in selling similar assets in the Garment Center. On behalf of Savanna, the Meyers launched a highly targeted marketing program, which ultimately led to substantial interest in the property despite the currently challenging investment climate.

The 63-67 West 38th Street sale reflects Savanna's core operating and investment strengths. The firm, along with a hedge fund partner, initially invested in this property by originating a senior loan 18 months ago to the prior owners. Savanna subsequently bought out their hedge fund partner and then negotiated a deed in lieu of foreclosure with their borrower. Once they owned the asset outright, Savanna then embarked on a two-pronged business plan of (a) using its operating expertise to begin the process of repositioning the building and (b) launching an aggressive marketing program to sell the Garment Center property.

"We are pleased with the outcome of this transaction," said Kevin Chisholm, Principal at Savanna. "Our platform's capacity to originate a high-yield loan, buy out our partner, complete a deed-in-lieu with the borrower, and then successfully sell the property while dual-tracking a repositioning plan has enabled us to turn a profit despite the horrific real estate market."

"This sale is also a testament to the resilience of the New York City real estate market," noted Nick Bienstock, Managing Partner at Savanna. "Despite the dearth of financing for value-added projects, we received substantial interest for this asset which demonstrates that even in today's severely constrained capital markets environment, there is liquidity for well-located, properly-priced, New York City real estate."

Savanna

Savanna is a New York City-based real estate investment and development firm that has been in operation since 1992. Since its inception, Savanna has invested more than $1.5 billion of capital in multiple asset types throughout the Northeast corridor and Mid-Atlantic region with a focus on investment opportunities that provide superior risk-adjusted returns.

SOURCE Savanna Investment Management, LLC

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