Chrysler Building sells for a discounted $150M, may become a hotel
Via Creative Commons
Update 3/14/19: A few days after Aby Rosen bought the Chrysler Building for the bargain price of $150 million, the real estate mogul told Bloomberg this week that he would consider converting the tower into a hotel.
Real estate mogul Aby Rosen has picked up another New York City landmark. Rosen’s RFR Holding LLC, which controls the Seagram Building and Lever House, bought the Chrysler Building for $151 million, according to the Wall Street Journal. The sale represents a major loss for majority owner Abu Dhabi Investment Council, who paid $800 million in 2008 for a 90 percent stake in the 77-story Art Deco tower.
As 6sqft reported, the skyscraper first hit the market in January after owners Tishman Speyer Properties, which owns a 10 percent stake, and the Abu Dhabi Investment Council hired real estate firm CBRE Group to sell the property.
While the Chrysler Building serves as an iconic part of the city’s skyline, the pre-war building comes with some major baggage, which is in part why RFR was able to buy it at such a discounted price.
Major upgrades would be required for the 90-year-old tower, a challenge for any 1930 building but particularly for one that is protected by landmark laws. Real estate experts told the WSJ that the tower’s nearly 400,000 square feet of vacant space could require a nearly $200 million investment to attract new tenants.
And leasing fees for the land beneath the building have risen significantly. Owned by the Cooper Union school, the land cost the Chrysler Building owners $7.75 million in rent in 2017. In 2018, the annual rent jumped to $32.5 million and is expected to grow to $41 million by 2028.
Tishman Speyer purchased the building and two next-door properties in 1997 for $220 million, selling its majority stake to the Abu Dhabi government a decade later for quadruple the price. The firm still owns 10 percent of the building but it selling that stake to new buyers, according to the WSJ.