The deal is the largest office lease in New York City to date in 2023
NEW YORK, July 6, 2023 /PRNewswire/ -- Pacific Oak Strategic Opportunity REIT, Inc. ("REIT"), through a joint venture with Savanna, announced today that it has executed a major lease for 640,000 square feet of office space at 110 William Street in downtown Manhattan. The 20-year deal is with an AA-rated New York City agency and will bring the occupancy of the building to essentially 100%.
"This is a momentous deal for New York City that took the collective efforts of our lenders, brokers, and advisory team partners to bring to a successful completion," said Keith Hall, CEO of Pacific Oak Strategic Opportunity REIT, Inc. "Office buildings are vital to the New York economy and major deals like this infuse tax revenue and support local operating businesses and real estate valuations that benefit all."
The new tenant will take occupancy gradually based on space completion and delivery schedule. Additionally, the recapitalization has significantly increased the REIT's common equity ownership of 110 William.
"This is an excellent outcome that further enhances the durability of the REIT's income and net asset value," said Peter McMillan, president of Pacific Oak Strategic Opportunity REIT, Inc. "Deals like this are reflective of the long-term commitment to office space that remains in one of the world's premier markets. We continue to be optimistic about opportunities we see to create value for our shareholders."
110 William is a 32-story, 928,000-square-foot office tower located at the corner of William and John Streets in downtown Manhattan's Financial District. The property was originally built in 1960 and underwent major renovations in 2000 involving new elevators, main lobby, and common corridors. Additionally, a comprehensive lobby restoration including new ceilings, pendant lighting, a new concierge desk, a new security system, and refinishing of the building façade was recently completed.
"We are thrilled to welcome our new tenant to 110 William Street," said Brian Reiver with Savanna. "This agency provides a critical service throughout New York City, and we could not be prouder to partner with them to create a purpose-built space that allows this vital government agency to best serve its constituency and continue its important work. This transaction fully stabilizes 110 William and reflects the 'partnership' effort required to complete a transaction of this scale and significance."
Ownership was represented in the deal by a Newmark team led by Hal Stein and Daniel Appel, along with Todd Stracci, now with JLL. The tenant was represented by Robert Giglio with Cushman & Wakefield and Ellen Israel with JRT Realty Group.
About Pacific Oak Strategic Opportunity REIT
Pacific Oak Strategic Opportunity REIT, Inc. is a public, non-traded corporation that invests in opportunistic and value-add commercial real estate and other real estate-related investments with a portfolio valued in excess of $2 billion1 comprised primarily of office, land, apartments, single-family rentals, and hotel assets. The REIT is managed by Pacific Oak Capital Advisors, a highly successful alternative investment group, that has completed transaction volume in excess of $15 billion of real estate equity and debt over the course of 13 years.
Pacific Oak Capital Advisors and its affiliated companies currently manage portfolios of real estate valued in excess of $4 billion. Pacific Oak's key businesses are Pacific Oak Strategic Opportunity REIT, a $2.0+ billion Non-Traded REIT; KORE Singapore REIT, a $1.6 billion publicly listed office REIT listed on the SGX; a Single Family Rental program managed by Pacific Oak Residential Inc. with approximately 3,000 SFRs, private placements including DSTs and Opportunity Zone Funds, and separate accounts.
About Savanna
Savanna, formed in 1992, is a vertically-integrated real estate investment manager based in New York City and focused on strategic property investments throughout the City's five boroughs. The firm pursues real estate equity and debt investments, including ground-up development and major repositioning projects. Savanna's equity investments target value add/opportunistic returns by adding value through asset management and/or property development, redevelopment, and repositioning, deploying a team of more than 80 experienced investment, asset management, construction, and leasing professionals. Savanna also selectively invests in real estate debt instruments that have the potential to generate equity-like returns, including preferred equity instruments, high yield bridge and mezzanine loans, and B-notes. Since 2006, Savanna has invested over $6 billion in total capital across approximately 17 million square feet of real property.
1 Equals the real estate and equity securities values as of September 30, 2022, adjusted for the Company's share of real estate properties owned via joint ventures, as reflected in the Company's December 2022 share valuation. For more information, see the Company's Form 8-K filed with the U.S. Securities and Exchange Commission (the "SEC") on December 8, 2022, as well as subsequent filings.
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