Ian Duncan The entrance to the theater at 94 St. Marks Place.

One of the neighborhood’s bastions of avant garde theater has been pulled back from the brink and will remain open for at least the next seven years.

Under St. Marks, the basement theater that hosts offbeat productions like “Naked Girls Reading,” “Basterdpiece Theatre,” “God Tastes Like Chicken” and “Thank You Robot,” has signed a new lease — allaying fears that the venue would be given the boot after its landlord put the five-story building on the market for $5.75 million.

“We are so happy and relieved to have come to this agreement,” said Heidi Grumelot, the artistic director for Horse Trade Theater Group, which operates the theater. “We doubt that any other basement in this city enjoys as much continual creative activity as Under St. Marks.”

The company started a frantic fundraising effort back in July, and at the time it looked like it would fall well short of its goal of $50,000. (A donation site currently shows that only $16,150 has been raised, which will go towards the new lease).

But it turned out that reports of the theater’s imminent demise may have been somewhat exaggerated.

Ian Duncan Heidi Grumelot and Erez Ziv can now breath a sigh of relief in their 45-seat theater.

“We were all quite nervous, but we also realized that the price requested and the landlord’s firmness on the price made a sale highly unlikely,” said Erez Ziv, the managing director of Horse Trade.

Caroline Hannigan, an associate with the brokerage firm Massey Knakal, confirmed that the owner of the building had decided to take it off of the market roughly three weeks ago, paving the way for the new lease agreement.

“We are still talking to the landlord about creating a situation where we can purchase the theater only,” said Mr. Ziv. “He is open to the idea and considering the potential benefit to him. We expect this approach to bear fruit.”

The new lease includes an increase of less than 10 percent in rent up until 2014. The Horse Trade crew has been so busy preparing for Halloween productions that they haven’t had time to celebrate the good news — but that left Mr. Ziv the perfect opportunity to throw in a plug for the next production at Under St. Marks.

“We really haven’t had time for a party yet!” Mr. Ziv said. “But if you come to the opening night of The Pumpkin Pie Show on Oct. 13, we will certainly be celebrating after the show.”