NEW YORK CITY — A partnership between Manhattan-based investment firm RFR Holding LLC and Austrian development group Signa Holding has acquired the 77-story Chrysler Building in New York City for $150 million, according to Reuters.
The seller was a Dubai-based investment group that acquired a 90 percent share in the property in 2008 for $800 million, according to The Wall Street Journal (WSJ). Abu Dhabi Investment Council purchased its stake from Tishman Speyer, a locally based investment and development company.
The Chrysler Building, located at the corner of 42nd Street and Lexington Avenue, is one of the more recognizable pieces of the New York City skyline. The 1.2 million-square-foot office property is perhaps best known for its art deco style that features a crowning dome and spire, as well as for being the city’s tallest building when it was completed in 1930.
The Cooper Union for the Advancement of Science & Art, a private college in Manhattan, owns the land on which the skyscraper is situated. Annual rent from the ground lease paid to the school increased substantially in 2018, rising from $7.75 million to $32.5 million, per WSJ.
The combined effect of rent increases, which will occur again in 2028 when the rent ascends to $41 million per year, and the heavy costs of maintaining the building’s dated structure and utility systems, forced the sellers to unload the property at a severe discount, according to industry sources. WSJ also reports that approximately one-third of the property’s available space — 400,000 square feet — is or soon will become vacant.
“The Chrysler building is unique in many ways, from its iconic status to its unfavorable land lease,” said Adelaide Polsinelli, vice chair at New York City-based Compass. “Because it’s landmarked, the costs of renovations are higher than that of most office properties, and the purchaser may be assuming additional obligations of the landlord, like renovation costs.”
Major tenants at the building include talent management firm Creative Artists Agency, global law firm Clyde & Co., national law firm Troutman Sanders and private equity firm InterMedia Advisors LLC. As of January, Amazon was also in talks to take a small amount of space at the building.