The Chrysler Building in midtown Manhattan which gained fame as the art deco skyscraper that has been such an integral part of the New York City skyline for 90 years, will now be sold, with its owners taking a substantial loss.
The iconic building, located near Grand Central Terminal in midtown Manhattan has been owned by the Tishman Speyer real estate firm along with an Abu Dhabi investment fund known as Mubadala.
The Abu Dhabi Investment Council paid $800 million for a 90 percent stake in the Chrysler Building in 2008, shortly before the financial crisis sent real estate prices plunging. The Wall Street Journal, which first reported the planned sale of the building, said estimates for the property’s current value vary widely. Real estate firm Tishman Speyer had owned the other 10%.
According to a source close to the deal, the selling price was a little over $150 million, as was reported by the Real Deal.
The CBRE Group was hired to sell the property, according to Darcy Stacom, chairman of CBRE’s New York City capital markets group. The story of the sale was first broken by the Wall Street Journal.
Brian Lott, a spokesman for Mubadala told CNN back in January, “Clearly, it’s an iconic building with tremendous reputational value for the right buyer.”
According to the Real Deal, real estate investor Aby Rosen’s RFR Holding is purchasing the building. Reuters reported that RFR’s partner on the deal is Signa Holding GmbH, Austria’s largest privately owned real estate company.
On Friday morning, the Commercial Observer reported that a source with knowledge of the talks said that sale price was higher “but not much higher” than the bids in the $100 million-range.
The Real Deal also reported that sources familiar with the sale said that another interested party in the building was real estate developer and investor, Ben Ashkenazy of the eponymously named Ashkenazy Acquisition company.
According to the Real Deal, “the developer and his partner Michael Fuchs have made a career out of snagging architecturally and historically significant buildings, such as the Mies Van Der Rohe-designed Seagram Building at 375 Park Avenue, the Skidmore, Owings and Merrill-designed Lever House at 390 Park Avenue, and the Church Missions House at 281 Park Avenue South.”
At this juncture, the closing on the deal has not been announced.
The incentive to sell the building at such a huge loss was due to the soaring rent the owners pay to Cooper Union, a New York college, for the land under the building. The rent is rising from $7.75 million last year to $32.5 million this year to $41 million in 2028.
Meantime, rents in the building itself are not rising nearly that fast.
Current tenants include Creative Arts Agency, co-working firm Spaces and law firm Moses & Singer. Asking rents are between $50 and $60 per square foot.
In recent years, such iconic buildings as the Waldorf Astoria hotel were purchased for top dollar. In 2016, the storied hotel was purchased by the Chinese firm known as Anbang Insurance for nearly $2 billion. In 2015, the Willis Tower in Chicago, which was formerly known as Sears Tower was purchased by the Blackstone Group for $1.3 billion.
While the building is an iconic landmark in the New York skyline, it is competing against newer office towers with large floor-to-ceiling windows and all the modern amenities, according to published reports.
The 77-story skyscraper was built between 1928 and 1930 and was the world’s tallest building until the Empire State Building claimed the title in 1931.
The Chrysler Building was headquarters of the American automaker until 1953, but it was named for and owned by Chrysler chief Walter Chrysler, not the company itself, as was reported by CNN.
Walter Chrysler had set out to build the tallest building in the world, a competition at that time with another Manhattan skyscraper under construction at 40 Wall Street at the south end of Manhattan.
Today, the Chrysler Building is the sixth tallest building in New York City but with plans set for later this year with the opening of a new office edifice on the West side of the city, then the Chrysler building will drop down another notch in terms of tallest building status.
The distinct architecture of the Chrysler Building includes it vaulted windows and the eagle gargoyles near the top. According to the CNN report, the building has been seen in such Hollywood blockbusters as Men in Black 3, Spider-Man, Armageddon, Two Weeks Notice and Independence Day.
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