Chrysler Building Sold
RFR Holding and Austrian company Signa Holding GmbH are buying the property for approximately $150 million.
NEW YORK CITY—Tishman Speyer Properties and the Abu Dhabi Investment Council have sold the Chrysler Building for approximately $150 million, according to multiple news sources. (The Real Deal and CNN have noted the Abu Dhabi fund is now a division of Mubadala,)
Reuters reported the buyers are Signa Holding GmbH, Austria’s largest privately owned real estate company, and RFR Holding, the New York-based firm founded by Aby Rosen and Michael Fuchs. The Real Deal had first reported on RFR’s negotiations and role in the transaction.
In January, the seller listed the iconic art deco New York skyscraper for sale and the brokerage firm CBRE had confirmed with GlobeSt.com that they were marketing the property.
The acquisition for $150 million represents a significant discount from when building interests were last sold in 2008. Tishman Speyer maintained a 10% interest but sold a 90% share to the Abu Dhabi Investment Council for $800 million.
In addition to being an older building that would require significant renovations and updates to make it competitive with new product on the market, the Chrysler Building is saddled with a ground lease of increasing costs. The Cooper Union school owns the ground beneath the building. In January, The Wall Street Journal reported the building owners paid $7.75 million for the ground lease in 2017 but that amount escalated to $32.5 million in 2018.
Woody Heller, vice chairman and co-head of the capital markets group of Savills Studley in New York City, in an January interview with GlobeSt.com noted “leasehold interests are not uncommon but typically the ground rent is a lower percentage of the building’s overall income.” He knows the Chrysler Building well, having structured the sale of notes and mortgage encumbering it in the past.
In addition, The New York Post reported the building is currently nearly 20% vacant.
The 1.2 million square-foot, 77-floor tower at 405 Lexington Ave., near E. 42nd St. was originally built in 1930, according to Real Capital Analytics. It was the world’s largest tower until another art deco architectural feat, the Empire State Building, was completed in 1931.