Manufacturer Alen Mamrout buys $200M note at Savanna’s 1375 Broadway, will own building: Sources

Alen Mamrout, who leads the fashion manufacturing and licensing company American Exchange Group, through the entity 1375 Owner LLC bought a note with an original principal of $200 million on August 15, 2024, from investors led by Aareal Capital and secured by Savanna’s office building (O4) at 1375 Broadway in the Garment District, Manhattan, city records show.

The note sale is part of a large recapitalization that will result in Mamrout acquiring ownership of the building and Savanna remaining in the investment, as well operating the property, according to sources. That negotiation is not yet complete.

In 2020, Savanna paid $435 million for the building, acquired with a $388.5 million financing package, as the Commercial Observer reported at the time. Brookfield Real Estate Finance originated the financing, and syndicated the $200 million senior debt to Deutsche Pfandbriefbank and Aareal, and kept a $103.5 mezzanine portion, and Declaration Partners took an $85 million preferred equity piece, according to the article. Adam Spies, Steve Kohn, Alex Hernandez, Alex Lapidus and Zachary Kraft, arranged that 2020 deal.

A Newmark team led by Adam Spies and Adam Doneger arranged this new note sale and the team is arranging the larger restructuring, according to a source familiar with the transaction.
The note sale closed on August 15, 2024 and was recorded on August 16, 2024. The property has 464,951 square feet of built space according to a PincusCo analysis of city data.

Newmark has also been marketing the office building 1370 Broadway, across the street.

Alan Mamrout founded American Exchange, which is a designer, manufacturer and wholesaler of fashion accessory watches, jewelry and footwear for major, according to the firm’s marketing material.

Prior sales and revenue

The 464,951-square-foot property generated revenue of $25.1 million or $54 per square foot, according to the most recent income and expense figures.

The property

The office building in Garment District has 464,951 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 104 feet and is 195 feet deep with a total lot size of 17,724 square feet. The lot is irregular. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $91.8 million. The most recent loan totaled $200 million and was provided by Deutsche Pfandbriefbank on July 10, 2020.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received one DOB violation and $6,855 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on August 29, 2017. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Garment District, The majority, or 69 percent of the 52.3 million square feet of commercial built space are office buildings, with hotel buildings next occupying 13 percent of the space. In sales, Garment District has 2 times the average sales volume among other neighborhoods with $532.7 million in sales volume in the last two years and is the 16th highest in Manhattan. For development, Garment District is the 4th most active neighborhood among other neighborhoods. It had 7.1 million square feet of commercial and multi-family construction under development in the last two years, which represents 14 percent of the neighborhood’s built space. There were four pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of two of the 12 commercial properties representing 898,281 square feet of the 2,423,486 square feet. The two identified owners are Savanna and Empire State Realty Trust.
There are no active new building construction projects on this tax block.

The majority, or 95 percent of the 2.4 million square feet of built space are office buildings, with industrial buildings next occupying 4 percent of the space.

The borrower

The PincusCo database currently indicates that Savanna owned at least 10 commercial properties in New York City with 2,202,860 square feet and a city-determined market value of $484.8 million. (Market value is typically about 50% of actual value.) The portfolio has $766.4 million in debt, with top three lenders as Deutsche Pfandbriefbank, PIMCO, and Aareal Capital respectively. Within the portfolio, the bulk, or 85 percent of the 2,202,860 square feet of built space are office properties, with O4 properties next occupying 15 percent of the space. The bulk, or 70 percent of the built space, is in Manhattan, with Brooklyn next at 30 percent of the space.

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