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\n Unsplash\/Maney Imagination<\/a><\/p>\n
The Chrysler Building, one of the world’s most recognizable skyscrapers, is poised for transformation as Tishman Speyer signs a ground lease and announces plans for renovations.<\/p>\n
Tishman Speyer<\/a> has signed a 150-year ground lease with private college Cooper Union<\/a> for the landmarked, art deco-style Chrysler Building, agreeing to pay $235M plus future ground lease payments, the amounts of which weren’t disclosed.<\/p>\n The global real estate giant \u2014 which is headquartered in its signature asset, Rockefeller Center \u2014 acquired the building with backing from a group of institutional investors, led by the Public Sector Pension Investment Board<\/a>. It now plans to reposition the 77-story skyscraper at 405 Lexington Ave. as a 1.3M SF boutique office tower, deploying 100% equity toward the project.<\/p>\n \u201cWe are pursuing an ambitious plan for the Chrysler Building<\/a> at a historically strong moment for the Manhattan office market,\u201d Tishman Speyer CEO Rob Speyer<\/a> said in a statement. \u201cWe are thrilled to lead this beloved building’s next chapter.\u201d<\/p>\n Cooper Union owns the land under the building and uses revenues from the ground lease as permanent financial support for the school. Escalating rent payments \u2014\u00a0from $7.8M in 2018 to a high of $32.5M \u2014 have been the main cause of its deteriorating value in recent years.<\/p>\n RFR teamed up with Austrian real estate firm Signa Holding GmbH to buy the tower<\/a> in 2019 for just over $150M, 11 years after the Abu Dhabi Investment Council paid $800M for a 90% stake in the skyscraper. <\/p>\n Tishman Speyer, which paid $220M for the ground lease in 1997, sold its 10% stake in the building and relinquished management to RFR.<\/p>\n But in November 2023<\/a>, Signa filed for insolvency and inadvertently kicked off a chain of events that led to Tishman Speyer once more becoming the tower\u2019s owner.<\/p>\n The 1,046-foot art deco tower deteriorated after the onset of the pandemic, with tenants telling The New York Times in 2024<\/a> that there were cracks in the ceiling and rodents scurrying through the ground-floor retail space.<\/p>\n RFR and Signa stopped paying rent and weren’t able to complete planned renovations to the tower, leading Cooper Union to begin eviction proceedings in September 2024<\/a>. <\/p>\n A bitter legal saga ultimately ended in a judge siding with the university<\/a> the following January and allowing it to eject RFR from the property. Cushman & Wakefield has been managing it since then.<\/p>\n Tishman and its partners, who fought hard to win the bidding war for the skyscraper, plan to start work immediately and deliver as soon as possible, said Savills Vice Chairman David Heller, who represented Cooper Union in the lease alongside Mark Todrys.<\/p>\n “There was a tremendous amount of interest,” Heller said. “There’s only one Chrysler Building.”<\/p>\n The planned extensive building improvements include turning 75% of vacant or soon-to-be-vacant space into prebuilt office suites. <\/p>\n Roughly 50% of the building is vacant, Heller said.<\/p>\n The new ownership also plans to turn the 61st floor into an amenity space, complete with a clubhouse containing an outdoor terrace and food and beverage offerings. It plans to use the space below the lobby for wellness services, according to The New York Times<\/a>.<\/p>\n The building’s classic exterior, including its signature crown, will also be polished and refreshed.<\/p>\n \u201cIf you had asked [Tishman], it was a regret of theirs parting with the asset,\u201d Heller said. <\/p>\n Tishman’s takeover comes amid the busiest Manhattan office market in decades, on pace for the most leases signed<\/a> since 2000, according to Colliers.<\/p>\n There is virtually no availability in Manhattan\u2019s best-in-class office towers, spurring developers SL Green<\/a>, BXP<\/a> and Extell Development to embark on ambitious new office developments. Millions of square feet of offices have been taken offline for residential conversions, tightening the market at the lower end as well. <\/p>\n