A US$420 million Commercial Mortgage-Backed Securities (CMBS) loan, secured by 51 West 52nd Street in Midtown, a 38-storey office building with 893,000 square feet of office space, will exit special servicing. The sponsor, Harbor Group International, has completed a loan extension. The CMBS loan, which constitutes the DBGS 2021-W52 Single-Asset, Single-Borrower deal, was transferred to special servicing prior to its October 2026 maturity, despite still having a twelve-month extension option, according to a report by Morningstar Credit Analytics.
A source close to the deal told Commercial Observer that the transfer of 51 West 52nd Street to special servicing was merely a "temporary, technical step". This was necessary to complete an already negotiated upsizing and extension with the existing lender, Deutsche Bank. The exact terms of the extension were not publicly disclosed. No broker was involved in the transaction.
Real estate investment and management company Harbor Group International acquired the office tower in October 2021 for US$760 million from ViacomCBS. ViacomCBS had used the building as its headquarters for decades and retained eleven floors of office space after the sale. It was the largest investment sale of 2021. Commercial Observer reported at the time that Harbor Group secured US$558 million in CMBS financing for the transaction. Deutsche Bank led the six-year, floating-rate deal, supported by Goldman Sachs and Brookfield Real Estate.
The financing was structured with a US$420 million senior mortgage debt provided by Deutsche Bank and Goldman, while Brookfield contributed a US$138 million mezzanine position. According to Morningstar, net cash flow performance at 51 West 52nd Street has "significantly underperformed throughout the loan's term" since the original loan origination in 2021. Occupancy rates fell from 99 percent to 86 percent, and cash flow was 37 percent below originally projected figures in June 2026.
A source familiar with the deal disputed this assessment, telling Commercial Observer that the building is "now fully leased, with a weighted average remaining lease term of over 13 years". The building has secured significant leases in recent years. Commercial Observer reported this summer that Alston & Bird, a law firm providing legal advice to Fortune 100 companies and private institutions, signed a 15-year lease for 169,664 square feet at 51 West 52nd Street.
Other recent lease signings reported by Commercial Observer include Kroll Bond Rating Agency moving into 121,000 square feet in January, and law firm Orrick, Herrington & Sutcliffe extending its lease for its 144,312 square foot space in July 2024. Since acquiring the building in 2021, Harbor Group International has invested US$150 million in renovations and tenant improvements.
- —Originally constructed in 1965 as the headquarters of the CBS network.
- —Known as the CBS Building or Black Rock, due to its dark, minimalist design.
- —Acquired by Harbor Group International in 2021.
- —Comprehensive investments of US$150 million in modernisation and tenant fit-outs.
