The Real Deal New York

Paramount, Savanna take stake in Harbor Group’s 55 Broadway

Preferred-equity deal values FiDi office tower at $215M

January 11, 2017 02:32PM
By Mark Maurer

From left: Albert Behler, Chris Schlank, Jordan Slone and 55 Broadway in the Financial District

Paramount Group and Savanna took a minority stake in Harbor Group International’s 55 Broadway, in a deal that values the Financial District office building at $215 million, or roughly $600 per square foot, sources told The Real Deal.

The investors’ stake is preferred equity as opposed to common equity. Their equity is now senior to Harbor’s equity in the 346,000-square-foot, 31-story building in terms of payout, sources said.

Harbor Group, a Virginia-based investment firm led by Jordan Slone, began shopping a minority position in the tower in fall 2015.  The firm paid $157 million for the full building in 2014, property records show.

The debt on the property is a $105 million loan from JPMorgan Chase.

“The preferred equity investment allowed us to provide partial liquidity for our investors while still retaining the upside from future appreciation in the property’s value,” said T. Richard Litton, Jr., president of Harbor Group, in a statement. A spokesperson for Savanna declined to comment, while Paramount could not be reached.

A JLL team led by Anthony Ledesma brokered the deal.

The Class A building is almost entirely occupied, though about half of the leases will expire in the next five years. Asking rents are in the $50s per square foot. Tenants include shared-workspace provider Cowork|rs and China-based Bank of Communications Limited.

Elsewhere in the neighborhood, Paramount and Morgan Stanley are in contract to sell a majority stake in the 50-story office tower at 60 Wall Street to Singaporean sovereign wealth fund GIC, in a deal valuing the building at $1.1 billion.

Savanna closed on the purchase of the Falchi Building in Long Island City last month for north of $255 million.

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