Built by Fisher Brothers in 1963, the 44-story office tower at 605 Third Avenue has long attracted major tenants due to its location near the Grand Central Terminal and the United Nations.
Fisher Brother retains and manages a 51 percent stake in the building, while the remaining ownership has changed hands twice in the last decade.
Rockpoint Group bought 49 percent of National Bulk Carriers stock at the end of 2013 and sold it to JPMorgan Asset Management about a year later. Last autumn, JPMorgan invested on the market, with a price that would value the entire property at about $ 600 million.
Meanwhile, the landlords secured new financing for the building, and Morgan Stanley provided it $ 400 million a loan package including CMBS debt of $ 309 million. Documents related to the securitization of this debt provide an inside view of real estate finances.
As of October, the 1.1 million square meter building was leased to 97 percent of 25 office tenants and five retail tenants. Property occupancy has averaged 95 percent over the past 25 years and its average base rent on site at $ 67 per square foot is well below the $ 80 Grand Central sub-market average, according to DBRS Morningstar report, providing a pillow in case the rent drops.
The best tenant on 605 Third is the Spanish media giant Univision, which has been based there since 2013 and accounts for about a fifth of the building’s lease. According to the loan prospectus, a large portion of the Univision space is subleased to other tenants for rents of between $ 41 and $ 52 per square foot.
The second largest tenant is the United Nations Population Fund, a United Nations agency for global reproductive and maternal health. The agency moved into the building in 2018 and its rent of $ 52 per square foot is the lowest of the 10 largest tenants.
The tenant with the third largest space is a fintech company Broadridge Financialwhich moved in last February. The company, whose services include processing proxy votes for shareholders’ meetings, previously consolidated several offices on One Park Avenue at Vornado Realty Trust.
Since the beginning of the pandemic, five tenants of the property – representing 14 percent of the area – have been granted rent deferrals, and one of these tenants has also received remission for half of its rent from August to December.
The recent refinancing of the building included a $ 91 million mezzanine loan from Morgan Stanley, which was sold to a third party, according to loan documents. The new financing paid out $ 190 million in existing property debt and returned $ 202 million in cash to the landlord.