According to a Crain’s New York article, Savoy Park (aka Delano Village) has lost over 40% of its value since the $175 million dollar purchase in 2006 by Vantage Properties and AREA. After purchasing the property, Vantage and AREA refinanced the property for $367.5 million, inluding a $210 million loan due in 2014. This leaves the owners a lot of work to do in order to get back above the water on this 7-building development. The loan has been deliquent since July 2011, leaving us to wonder what is the likely scenario come 2014.
Vantage and AREA purchased the building in order to begin the deregulation process converting the apartments to market-rate. Unfortunately for them, the timing of their purchase was near the height of the market and it’s been slow to get the market rate rents back up to a place where they can begin to service their debt. In fact, according to a New York Times article, the net cash flow at Savoy Park may have never risen above $7 million per year, which is only about a third of its annual debt payments.
Savoy Park, originally known at Delano Village, was built in the 1950′s and is comprised of 7-buldings with approximately 1,800 apartments.
Photo by CoStar Group