NEW YORK, NY, November 18, 2014 – TIAA-CREF, a leading U.S. financial services organization and one of the world’s leading investors in real estate, today announced the acquisition of 21 Penn Plaza, a prime midtown Manhattan office property, from Savanna and the Feil Organization, who purchased the property in a joint venture in 2011.
Situated on the southeast corner of West 31st Street and 9th Avenue, 21 Penn Plaza is adjacent to Manhattan's newest neighborhood, the Hudson Yards District. The property is within the epicenter of the $27 billion of investment currently underway on Manhattan's far west side. Nearby developments include the Moynihan Station (directly across the street), Related Companies and Oxford Properties Group's Hudson Yards and Brookfield’s Manhattan West. The property offers convenience to commuter rail service, the West Side Highway, the Lincoln Tunnel and Hudson River ferries. The NYC subway system is accessible via nearby Penn Station and, next year, the extension of the No. 7 subway to 34th Street and 11th Avenue. In addition, the final section of the High Line public park has just opened, extending to 34th Street and 12th Avenue.
"We believe this property is well positioned to take advantage of the rapid changes and revitalization happening in midtown west," said Henry Dong, senior director, global real estate for TIAA-CREF. "Rents are on the upswing in the area and we see that trend continuing. The massive redevelopment of the neighborhood should make it a destination for employers, tourists, shoppers and new residents."
Following an investment of close to $5 million in base building upgrades to the property, including new lobbies, entrances and mechanical systems, Savanna and the Feil Organization successfully leased over 225,000 square feet of space to re-stabilize the property at 98% occupancy prior to marketing the property for sale through Bob Knakal and his team at Massey Knakal Realty Services.
"21 Penn Plaza is located in the path of progress of the exciting development occurring in the far west side of Manhattan," said Bob Knakal. "Its location, combined with the quality of tenancy and capital improvements in the property make it an ideal home for companies seeking to define the frontier of what should become a new epicenter of activity in Manhattan."
"We are proud of the excellent work performed by our joint venture in transforming 21 Penn Plaza into a CORE/CORE+ asset," said Christopher Schlank, Managing Partner at Savanna. "We have made a significant investment in its infrastructure and enhanced 21 Penn Plaza's tenant base on our way to re-stabilizing it. It's a great asset in an exciting location experiencing rapid change," said Jeffrey Feil, CEO of the Feil Organization.
As noted, the property is currently 98% leased. Retail tenants include Avon, Dunkin' Donuts and H&R Block. Office tenants include Saks & Company, Langan Engineering and Amtrak. The TIAA Real Estate Account, a TIAA insurance separate account, will hold the property following the acquisition.
TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with $840 billion in total assets under management (as of 10/1/2014) and is the leading provider of retirement services in the academic, research, medical and cultural fields.
TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC, distribute securities products.
Formed in 1992, Savanna is an institutional real estate private equity firm and asset management company based in New York City and run by Managing Partners Chris Schlank and Nick Bienstock. The firm pursues opportunistic real estate equity and debt asset investments throughout the northeastern United States, with a particular focus on directly owning and operating properties in New York City. The firm’s equity investments target superior risk-adjusted returns by adding value through asset management and/or property development, redevelopment, and repositioning. 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 more than $2.3 billion in total capital across 11.9 million square feet of real property.
The Feil Organization, headed by Jeffrey Feil, owns and operates over 26 million square feet of commercial, retail and industrial properties, over 5,000 residential rental units as well as hundreds of net leased properties throughout the United States. For over 50 years The Feil organization is one of the few truly full-service real estate companies, handling leasing, management, construction and development in-house. It maintains offices in New York City, Nassau County, Chicago and New Orleans Louisiana.