Pacific Oak Capital, Savanna Default on 110 William Street Loan

Keith Hall of Pacific Oak and Christopher Schlank of Savanna with 110 William Street (Loopnet, Pacific Oak)

A Lower Manhattan office building that has lost several notable tenants in recent years is in financial trouble.

Pacific Oak Capital and Savanna defaulted on their loan for 110 William Street in the Financial District, Pacific Oak said in a Filing with the SEC Wednesday. The California-based real estate investment firm was notified of the default in June by a lender, which was not identified in the filing.

However, Invesco Real Estate provided Pacific Oak and Savanna with a $349 million refi for the building in 2019, Reported Trade Observer.

Loan extension talks between Pacific Oak, Savanna and the lenders are ongoing, according to the SEC filing. Pacific Oak owns a 60% interest in the 32-story, 928,000 square foot tower.
Neither Pacific Oak nor Savanna responded to requests for comment.

The loan Invesco refinanced a $265 million loan package provided by Morgan Stanley in 2017. Invesco has also not yet responded when contacted for comment.

KBS Capital Advisors and Savanna bought the property from Swig Equities and the Dubai Investment Group for $261 million in 2014. The pair then set about renovating the building.

Pacific Oak, which was founded in 2018 by KBS co-founders Keith Hall and Peter McMillian, began managing a trio of REITs established by KBS in 2019.

Pacific Oak and Savanna’s default at 110 William Street comes as the building has seen notable tenant turnover in recent years.

The New York City Economic Development Corporation, which occupied nearly a third of the building’s square footage, moved across the street to One Liberty Plaza at 165 Broadway, according to the agency’s website. Advertising company Constellation Agency left for space around the block from One World Trade Center, and New York City Housing Development Corporation is set to move to 120 Broadway.

Flexible workspace provider Knotel occupied up to 117,000 square feet over three floors at 110 William Street in 2019, when the company more than tripled its footprint from the 36,000 square feet originally signed in 2018. Knotel filed for bankruptcy last year and was purchased by Newmark.

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