HGI Ekes Out Extension on $420M Loan at Black Rock Tower
Harbor Group International landed an extension for a large commercial mortgage-backed securities loan at the famed Black Rock building in Midtown West, though there are mixed signals on the level of distress facing the loan and property.
HGI scored an extension on the $420 million CMBS debt a month ahead of its October maturity, the Commercial Observer reported, citing an alert from Morningstar Credit Analytics. The debt was extended despite a 12-month option being available to ownership. Terms of the extension were not disclosed.
The loan backing the 38-story, 893,000-square-foot property at 51 West 52nd Street was transferred to special servicing prior to the extension agreement. A source told the publication, however, that it was “a temporary, technical step,” as an extension with Deutsche Bank was already in place.
HGI did not respond to the publication’s request for comment.
There’s a significant discrepancy regarding the performance of the building in the five years since HGI acquired the office property and secured the initial loan.
Since 2021, net cash flow “significantly underperformed,” according to Morningstar, seeing occupancy drop to 83 percent and cash flow fall 37 percent below underwritten levels as of June. But a source told the Observer the property was fully leased.
The disputed facts could be an information lag. In June, for instance, international law firm Alston & Bird signed a 170,000-square-foot lease at the property, which was reported to bring it to full occupancy at the time. Kroll Bond Rating Agency signed a lease for 121,000 square feet at the beginning of the year.
HGI acquired the property in 2021 from ViacomCBS for $760 million and quickly poured about $128 million into improvements aimed at attracting top-tier tenants. The upgrades include a revamped lobby, a new amenity center dubbed Club 53 and food-and-beverage services.
The dark granite tower with tinted glass windows was designed by architect Eero Saarinen, completed in 1965 and later became a designated landmark. The 2021 sale was the first time the building had changed hands.
Other tenants in the tower include law firms Orrick, Herrington & Sutcliffe and Wachtell, Lipton, Rosen & Katz.
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