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Harbor Group International’s $760 million purchase of Black Rock, the Midtown office tower known for its dark granite exterior and as the former longtime headquarters of CBS, is a bet on the recovery of the area’s office market.
After purchasing the building at 51 West 52nd Street with $378 million in equity and a $420 million CMBS loan, Harbor Group plans to renovate its soon-to-be vacant space and charge premium rents thereafter. Meanwhile, three-quarters of white-collar workers in Midtown have yet to return to the office full time.
While the office market remains uncertain, rents at the 38-story tower produce an annual net cash flow of approximately $33.8 million, according to ratings agency DBRS Morningstar — and there is room for them to rise.
Asking rents in the Plaza District submarket of Midtown, which includes Black Rock, were about $100 per-square-foot in the second quarter of 2021. Average asking rents at the tower, meanwhile, are $76.45, according to DBRS Morningstar. Documents associated with the CMBS loan provide an inside look at the property’s finances.
The building is currently 96.4 percent occupied, with all leases set to expire during the term of the 10-year, interest-only loan package, which is worth a potential $558 million. The loans include $138 million in potential mezzanine loan proceeds from Brookfield Real Estate Finance.
CBS remains the largest tenant in the building, despite relocating its headquarters to 1515 Broadway after its merger with Viacom in 2019. Other notable tenants include powerhouse law firms Wachtell, Lipton, Rosen & Katz and Orrick, Herrington, & Sutcliffe. Turkish chef and Instagram darling "Salt Bae" operates his Nusr-Et steakhouse at the building.
Finnish-American architect Eero Saarinen designed the tower, built in 1963, as well as Dulles International Airport in Washington, D.C. and the Gateway Arch in St. Louis. CBS’ sale of the building is the first time it has transacted.