New York-based Savanna has announced the sale of 15 East 26th Street, an office building in Manhattan, to Rockrose Development for $105 million. The sale price represents almost twice the price that the real estate investment firm initially paid for the building in 2012.
Savanna acquired the 150,000-square-foot property for $57 million in February 2012 from a joint venture between Angelo Gordon & Co, Belvedere Capital and Metropolitan Realty. Through a $9 million capital improvement plan, Savanna modernized the building with an extensive redesign of the entrance and lobby, an upgrade of the freight and passenger elevators, a complete sidewalk replacement and a conversion of the boiler to more efficient fuel.
Constructed in 1920 and overlooking Madison Square Park, 15 East 26th Street is located in a landmarked historic district and houses high-tech and creative tenants including Vera Wang, which has executive offices and a showroom in the building. The eight-story building currently is more than 95 percent leased.
“We are pleased that, upon completion of our business plan and leasing efforts at 15 East 26th Street, we will be able to deliver exceptional returns to our investors,” said Nicholas Bienstock
, managing partner of Savanna, in a statement. “Rockrose is acquiring a terrific asset in a market where we see strong demand and great additional opportunity.”
Under Rockrose’s ownership, the building will be further modernized and upgraded. The purchase is part of a strategic plan for the New York-based development firm to grow its office portfolio in New York City and Washington, DC. Over the last two years, Rockrose has purchased six office buildings in Washington, DC and acquired 15 East 26th Street to expand its office portfolio in the New York market.
Meanwhile, Savanna currently is fundraising for its third value-added vehicle, which held a first close in September on $105.3 million to invest in distressed office properties in New York, Washington DC and Boston. Savanna Real Estate Fund III, which is targeting $650 million in equity, has brought in commitments from such pension plans as the Kansas Public Employees Retirement System, which committed $40 million in July; the Teacher Retirement System of Texas, which committed $15 million in July; and the Ohio Police and Fire Pension Fund, which committed $45 million in June.