The Chrysler Building at 405 Lexington Avenue and Aby Rosen, co-founder and principal of RFR Holding (Credit: iStock)
Aby Rosen’s RFR Holding is in advanced talks to purchase the Chrysler Building, one of the world’s most recognizable skyscrapers, The Real Deal has learned.
A purchase-sale agreement between RFR and the sellers, Tishman Speyer and an Abu Dhabi government fund, has been drafted but not yet signed, a source familiar with the deal said.
The sale price was not immediately clear, but one source with knowledge of the talks said that figure was higher “but not much higher” than the bids in the $100 million-range the Commercial Observer reported Friday morning. The price would be several notches lower than the $800 million the Abu Dhabi fund paid Tishman Speyer for a 90-percent stake in the tower in 2008.
Since then, the cost of the ground lease, paid to the owner of the land, Cooper Union, has skyrocketed, while the rents at the building haven’t kept up. The annual ground lease rent increased by $32.5 million from $7.75 million last year, and is due for another reset to $41 million in 2028. And iconic though the 77-story, 1.2 million-square-foot Art Deco property is, it’s difficult for it to compete in the leasing market with the new crop of towers boasting oversized windows and the latest amenities. Current tenants include Creative Arts Agency, coworking firm Spaces and law firm Moses & Singer. Asking rents are between $50 and $60 per square foot.
CBRE’s Darcy Stacom and Bill Shanahan are marketing the property on behalf of Tishman Speyer and the fund, formerly known as the Abu Dhabi Investment Council but now a division of Mubadala, which controls a vast portfolio of global assets including a large stake in New York’s Park Lane Hotel and the Manchester City soccer club.
Ashkenazy Acquisition was also said to have been interested in the property, according to sources. Representatives for Tishman, RFR, CBRE and Ashkenzy were not immediately available for comment.
For Rosen, landing the Chrysler Building would be akin to adding the Kohinoor Diamond to an already formidable collection of gems. 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.
But ground-lease complications have plagued RFR before. The company had a long struggle at the Lever House, where it failed to refinance a loan on the building due to a sharply-escalating ground lease. Last July, Brookfield Properties and Waterman Interests took over the property’s ground lease, though it’s unclear if RFR continues to be involved.
Though a deal for the Chrysler Building anywhere near the suggested price range would represent a serious loss for the Abu Dhabi fund, Tishman Speyer has already all but cashed out: In 1997, it bought the property out of foreclosure, along with two other buildings, for just $220 million. It sold a 90-percent stake in the Chrysler to Abu Dhabi, right before the market turned in 2008, for $800 million.