In the face of higher costs and increased competition, Manhattan’s landmark Chrysler Building is for sale.
The owners, an Abu Dhabi government fund and developer Tishman Speyer, have hired CBRE to market the tower, the Wall Street Journal reported. The iconic building has been competing with newer office towers that are equipped with modern amenities like outdoor terraces and fitness centers.
While estimates vary, several investors said the building could be hard-pressed to sell for the $800 million the Abu Dhabi Investment Council paid for a 90 percent stake in the tower. The costs for maintenance and improvements could also affect the price. Tishman Speyer spent $100 million in improvements when it took over the tower in 1997. The partnership with Abu Dhabi has spent additional cash to maintain the building and attract new tenants, including Creative Arts Agency and co-working firm Spaces.
“When things break, it takes much longer to fix because there’s only one guy on the planet that has the tools to fix something from the 1920s and 1940s,” said Adelaide Polsinelli, vice chair of the commercial investment sales and leasing division at Compass.
The building is also subject to a ground lease with Cooper Union. The annual ground lease fee jumped to $32.5 million from $7.75 million last year, the Journal reported, citing the school’s financial documents. The rent will reset again in 2028, reaching $41 million.
Other prominent buildings, including the Willis Tower in Chicago and the Waldorf Astoria in New York, have attracted domestic and overseas investors in recent years. The Chrysler Building’s owners are similarly hoping to attract international investors.
The 77-story art deco tower was built between 1928 and 1930. Designed by William Van Alen, the tower was constructed in a contest to become the world’s tallest building. Chrysler Corp. founder Walter P. Chrysler took over the project from the developer. Its title as the world’s tallest tower was short-lived, with the Empire State Building surpassing it in 1931. [WSJ] — Meenal Vamburkar
Source: The Real Deal Los Angeles