Pacific Oak REIT Puts 110 William Street Up For Sale

The brainchild of Los Angeles-based Pacific Oak Capital Advisors is looking to sell a Financial District office tower as part of a liquidation plan with Israeli bondholders.

Pacific Oak Strategic Opportunity REIT put the nearly 1 million-square-foot office building at 110 William Street up for sale, The Real Deal has learned. The company is eyeing a price tag of about $400 million.

The building is 93 percent leased, mostly to a handful of New York City government agencies, according to an offering memo from Newmark. Yet despite the strong occupancy, the building’s financial underpinnings are shaky.

Pacific Oak Strategic Opportunity REIT was in maturity default on its $305.3 million senior and $24 million mezzanine loans, the company disclosed in June. And the nontraded REIT is in the midst of liquidation after restructuring its debt with Israeli bondholders over the summer.

“The arrangement imposes a structured asset-disposal timeline: the BVI is required to sell at least 150 properties within the first six months following the closing date, then at least 100 properties during each successive three-month period,” the publication AltsWire wrote in June. “Failure to meet those thresholds constitutes an event of default.”

Representatives for Pacific Oak Capital Advisors and the REIT did not immediately respond to requests for comment. A Newmark team led by Adam Spies, Adam Doneger and Josh King is overseeing the sales process.

Pacific Oak Capital Advisors, headed by Drexel Burnham veteran Keith Hall and Aetna Life Insurance’s Peter McMillan, purchased a stake in 110 William Street alongside Nicholas Bienstock and Christopher Schlank’s Savanna, which purchased the tower in 2014 for $261 million.

Savanna transferred its 40 percent ownership stake in 2023 to Pacific Oak, which agreed to invest between $110 million and $130 million of equity for tenant improvements.

Hall and McMillan launched Pacific Oak Strategic Opportunity REIT in 2009 (then known as KBS Strategic Opportunity REIT) as a non-traded REIT — a kind of semi-illiquid investment vehicle that has faced challenges in times of distress.

In January, McMillan and Hall were removed as the REIT’s president and CEO, respectively. And Pacific Oak Capital Advisors no longer manages the REIT.

The REIT reportedly appointed restructuring specialist Bradley Scher in June to oversee its wind-down.

In addition to 110 William, the company also owns the office building at 210 West 31st Street.

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