NEW YORK CITY — Tishman Speyer has entered into a 150-year ground lease agreement for the Chrysler Building, with plans to invest $235 million in restorations to the landmark Manhattan office tower at 405 Lexington Ave.
New York City-based Tishman Speyer is joined in the transaction by multiple global institutional partners, with the Public Sector Pension Investment Board (PSP Investments) serving as lead investor.
Ground-rent fees, which have not been disclosed, will be paid to the landowner, The Cooper Union for the Advancement of Science and Art, a private college in New York’s East Village.
Opening in 1930, the 1.3 million-square-foot, 77-story tower was built to house the Chrysler Corp. and features decorative elements inspired by automobile parts, including eagle gargoyles modeled after the hood ornament on the 1929 Plymouth.
Tishman Speyer and its partners will use 100 percent equity to finance the ground lease and redevelopment. Plans call for new amenities on the 61st floor featuring a lounge with outdoor access and food-and-beverage offerings. Fitness, wellness and meeting spaces will be situated in the building’s underground arcade, which connects to Grand Central Terminal and Manhattan’s subway system.
The renovation investment will also cover restoration of the façade and the distinctive Art Deco crown atop the building. Inside, Tishman Speyer will update the mechanical, elevator, electrical and air handling systems.
Tishman Speyer also will prebuild 75 percent of the property’s current and upcoming vacancy with ready-to-occupy suites. This approach will allow tenants, particularly smaller businesses, to move in quickly, according to the firm. A completion date for the renovations has not been disclosed.
The Chrysler Building deal extends a partnership between Tishman Speyer and PSP Investments that has included major office acquisitions and redevelopments in London and Paris. It also marks a return to the iconic property for Tishman, which held the ground lease from 1997 until 2019 in partnership with Travelers Cos.
Ottawa, Ontario-based PSP, which had C$320.6 billion in net assets under management as of March 31, invests funds for pension plans covering Canada’s federal public service, the Canadian Armed Forces, the Royal Canadian Mounted Police and the Reserve Force.
The land beneath the Chrysler building, which The Cooper Union has owned since 1902, is a major source of revenue for the school. Cooper Union provides every undergraduate with at least a half-tuition scholarship. Cooper Union is aiming to provide full-tuition scholarships for all undergraduate students by the 2028-29 academic year.
— Lynn Peisner