Newly Acquired Black Rock Tower to Get ‘Significant Upgrades’
Harbor Group International is buying the Midtown tower for $760 million from ViacomCBS
The amenities arms race continues in Manhattan office space.
Privately owned, real estate investment and management firm Harbor Group International said that it would undertake a major upgrade of the CBS Building at 51 West 52nd Street — aka Black Rock — after acquiring the 38-story, Eero Saarinen-designed tower from ViacomCBS for $760 million.
Harbor Group announced the deal on Monday. It is the first sale of the building since it opened as CBS’ headquarters in 1964. ViacomCBS — as a result of a pre-pandemic merger — plans to lease space in the building on a short-term basis. It currently occupies 11 floors in the approximately 817,000 usable square-foot space; Black Rock has been open to ViacomCBS employees since July 6 on a voluntary basis for those who are vaccinated.
The deal is expected to close before the end of this year. Law firm Wachtell, Lipton, Rosen & Katz is the other major tenant in the building with 250,000 square feet of space.
Along with announcing the much-ballyhooed sale, Harbor Group also said it “plans to implement a significant capital program to reposition the property in support of a long-term leasing plan. Updates will include significant upgrades to the lobby and other tenant amenities.” Those other tenant amenities also include the cafeteria, according to Variety, which first broke news of the sale.
Such work is in line with a general rush by owners and developers to produce heavily amenitized office properties in Manhattan. Part of this is due to demand from technology firms, which are now animating tenant demand as much as, if not more so, than the traditional office driver, financial services. Part of it, too, is due to a shift in how office space is used now more as a place for collaboration and socialization rather than heads-down work (that can increasingly be done remotely).
And another part is due to the emphasis that COVID put on health and wellness within shared spaces. Offices, then, have to have the latest in design and technology, including in air filtration and food offerings, to draw credit tenants.
“I do think, 100 percent, that every tenant wants something along these lines now, and I think it’s a spectrum of how far do we go as a landlord or a developer to get there,” Erik Horvat, a managing director and head of real estate at developer The Olayan Group, told Commercial Observer in July.
The Black Rock deal ups Harbor Group’s asset count in Manhattan. It also owns 24 West 40th Street and 55 Broadway. As for ViacomCBS, the media company had planned to sell the building in 2020, but the pandemic put that move on ice.
“This agreement follows the previously announced strategic review of non-core assets that we completed shortly after our merger,” Naveen Chopra, ViacomCBS’ chief financial officer, said in a statement. “The use of proceeds from this transaction will remain consistent with our previously discussed capital allocation strategy, allowing us further financial flexibility to invest in our strategic growth priorities, including streaming.”
Darcy Stacom and Bill Shanahan of CBRE are representing ViacomCBS in the transaction. It’s unclear who repped Harbor Group. It and ViacomCBS declined to comment beyond what was in the press release about the sale and the upgrades.
Tom Acitelli can be reached at email@example.com.