The Real Deal New York

Pearlmark refis Tower 56 with $125M Blackstone loan

Chicago-based private equity firm bought the boutique property a decade ago from Harry Macklowe
By Rich Bockmann | August 31, 2018 01:45PM

Blackstone’s Kathleen McCarthy, Tower 56 at 126 East 56th Street, and Pearlmark’s Stephen Quazzo (Credit: Blackstone via Youtube, LoopNet, and Urban Land Institute)

Pearlmark Real Estate Partners landed a $125 million loan from the Blackstone Group to refinance its boutique Tower 56 office building in the Plaza District.

Chicago-based Pearlmark, headed by CEO Stephen Quazzo, started searching for new debt in the spring to refinance the 33-story office tower it bought from Harry Macklowe’s Macklowe Properties for $158 million in 2008.

The 187,000-square-foot property between Park and Lexington avenues at 126 East 56th Street was part of the $7 billion former Equity Office portfolio Macklowe sold off when the credit markets collapsed a decade ago amid the global financial crisis.

Real estate private equity firm Pearlmark has since spent $30 million to update the building, including a full renovation of the lobby and an upgrade to the building’s mechanical system.

The Blackstone loan comes with a five-year term and a commitment that allows Pearlmark to draw future funding for leasing costs, a source with knowledge of the loan told The Real Deal.

The financing replaces a $92.5 million loan that Pearlmark got from Canadian bank CIBC in 2013, property records show.

Representatives for Pearlmark and Blackstone could not be immediately reached for comment.

Newmark Knight Frank’s Dustin Stolly and Jordan Roeschlaub secured the financing on behalf of Pearlmark, along with their colleagues Nick Scribani and Chris Kramer.

Dustin Stolly and Jordy Roeschlaub

A number of the tower’s below-market leases are coming due, and Pearlmark’s “ability to roll near-term, below-market leases to market” helped during negotiations with lenders, Stolly said.

Roeschlaub added that with floor plates ranging from 8,000 to 10,000 square feet, the property is designed for small hedge funds and family offices.

“It’s got a diversified rent roll,” he said.

Tenants in the building include the Lanier Law Firm and the art appraisal company Winston Art Group.

Pearlmark, founded in 1996, is active in its hometown of Chicago and Denver, where it reportedly just sold a 202-key Ritz-Carlton hotel to Xenia Hotels & Resorts for $100 million.

Here in New York, the company also owns 375 West Broadway in Soho, where Gucci signed a two-year lease last year.