Viewed from anywhere but directly across the street, the ridged façade of the CBS Building obscures its narrow windows, giving the impression of a giant slab of dark-gray granite. Nicknamed Black Rock, the landmark tower has stood at the corner of Sixth Avenue and 52nd Street for 35 years, a monument, of sorts, to the achievements of William S. Paley, who first assembled sixteen radio stations into the Columbia Broadcasting System and later commissioned the architect Eero Saarinen to design its forbidding headquarters.
But this month, Mel Karmazin, the company's newly appointed chairman and chief executive, took the first steps toward putting Black Rock on the block. Real-estate industry sources say the company has picked investment bank Lazard Frères & Co. to help explore a possible sale. (Over the past two years, Lazard has done a brisk business helping to sell nearby Manhattan trophy properties, including 712 Fifth Avenue, the GM Building, the Chrysler Building, and the three development sites now sprouting office towers near Times Square.) If sold today, Black Rock could fetch as much as $400 million, according to James Kuhn, president of Newmark & Co. Real Estate, who calls it "one of the ten best properties in New York." A CBS spokesman declined to comment.
Karmazin, the former head of the CBS radio division who officially took the company's helm this year, has boosted its stock price with a hard-nosed devotion to the bottom line. "Selling the building would unlock a lot of hidden value," said Victor Miller, analyst at investment bank Bear Stearns & Co. "Right now, Wall Street doesn't even put a price on Black Rock when evaluating the company."
This could be Karmazin's best moment to sell of the trophy tower. Commercial-property prices peaked last summer, before the global market turmoil spooked mortgage lenders. But "we are still pretty darn close to the peak for this cycle," says Steven Swerdlow, New York head of real-estate firm CB Richard Ellis. Besides, he says, there is always demand for a rarity like Black Rock.
CBS last year hired brokerage firm Cushman & Wakefield to help it find new space and was threatening to move its studios to New Jersey. Then last month, the network signed a deal for $10 million in tax subsidies from New York City to keep its home base here and maintain its payroll in town. So even if the network does sell Black Rock, it will likely remain as a tenant, though it's expected to cut its space from half of the building to a quarter, relocating displaced staff elsewhere in town, according to sources.
Meanwhile, Karmazin is thinking of cutting back CBS's 57th Street studio space, too. CBS is negotiating with Donald Trump, who bought the GM Building last summer, to lease out its automobile showroom as a windowed studio for the network's morning show. In the end, Karmazin may find a way to cash in CBS's venerable headquarters and claim a Manhattan landmark of his own as the new face of the Tiffany network.