A High Line gallery space is in foreclosure proceedings, the latest grim news for a landlord that just last month sold a Midtown office building at a steep discount.
Lenders moved to seize 525 W. 22nd Street’s storefronts after longtime owner Savanna defaulted on the $14 million mortgage, according to a lawsuit filed Tuesday in New York State Supreme Court. The Chelsea property, known as the Spear Building, has 30 loft condominiums that are not part of the foreclosure action.
It’s the latest headache for Park Avenue-based Savanna, a developer led by Christopher Schlank and Nicholas Bienstock that owns 14 commercial and residential properties in Manhattan, Brooklyn, and Queens. Last month the partners sold their 500,000 square-foot office building at 1375 Broadway for $170 million, city records show, after acquiring the tower near Herald Square for $435 million in 2020. In November a lender filed a pre-foreclosure action against 521 Fifth Ave., a 460,000 square-foot office tower near Bryant Park the firm acquired from SL Green for $381 million in 2019.
Savanna redeveloped the Spear Building in the mid ’90s, when West 22nd Street was changing from a gritty industrial block into a gallery district. The opening of the High Line in 2009 then turned the neighborhood into a major attraction, and new buildings rose up on both sides of the park. In 2013 Savanna took out a new $14 million mortgage for the Spear’s 16,000 square feet of retail space, which it leased to four galleries.
After several art dealers shut their doors amid the pandemic in 2020, Savanna agreed to lower rents to keep storefronts occupied. Rental income plunged. The mortgage was last paid in November 2023, a month before it came due, according to credit-rating agency Moody’s.A January 2024 appraisal valued the property at $16 million. Savanna tried to negotiate a loan modification but the clock ran out Tuesday when the trustee for mortgage investors, U.S. Bank, moved to foreclose.
Savanna didn’t return a call or email seeking comment by press time.
