Blackstone’s Deal With Fisher Values 1345 Sixth Ave at $1.4B

Blackstone Real Estate’s investment in Fisher Brothers’ 1345 Sixth Avenue is official, providing the Manhattan office building with a fresh valuation.

An affiliate of Blackstone acquired a 46 percent interest in the Midtown Manhattan property, Fisher Brothers announced, while adding that the firm itself also increased its majority ownership of the building. The investment gave the building a full capitalization of $1.4 billion. That’s a jump from late last year, when S&P Global appraised the property’s value at $896 million.

The landlords also refinanced the property with $850 million from the CMBS market, provided by Morgan Stanley, Citibank and JPMorgan Chase.

“The completion of the $850 million refinancing package enables us to continue to strategically invest in the asset, while simultaneously increasing our ownership stake in the building,” Fisher Brothers partner Winston Fisher said in a statement.

The terms of the refinancing were not disclosed in the press release, though Crain’s previously reported that the debt would mature in only two years, demonstrating the hesitancy lenders still feel regarding Manhattan’s office market. The two-year term, disclosed in a report from credit rating agency KBRA, reportedly includes three one-year extension options if certain financial conditions are met.

The 50-story, 2-million-square-foot building is 92 percent leased. Intercontinental Exchange signed a lease for 143,000 square feet last year. A month prior, law firm Paul, Weiss, Rifkind, Wharton & Garrison signed a 20-year lease for 765,000 square feet, the largest office lease of 2023.

Performance was bolstered by a $120 million capital project, during which Fisher updated the exterior and added an amenity floor and a public art installation.

But ownership is still on the hook for $200 million in tenant improvements, largely dedicated to Paul Weiss. The law firm also secured $150 million in rent concessions, a hit to the bottom line considering it occupies 42 percent of the property.

The investment represented Blackston’s first big move in Manhattan’s office market in three years, when it acquired a 49 percent stake in One Manhattan West from Brookfield and the Qatar Investment Authority in 2022, valuing that property at $2.85 billion.