Real estate firm RFR Holding has signed a contract to acquire the 89-year old Chrysler Building, reports say
The owners of New York’s Chrysler Building have reached at an agreement to sell the iconic building for a little more than $150 million at a substantial loss, according to people familiar with the matter, reported The Wall Street Journal.
The 77-storey office tower was put up for sale by its owners, Abu Dhabi investment firm Mubadala and real estate group Tishman Speyer. Mubadala acquired a 90% stake in the building in 2008, having paid $800 million at the time of purchase. Meanwhile, Tishman Speyer which had bought the building in 1997 for a reported $210-250 million had retained a 10% stake in the building since 2008.
WSJ revealed that a number of challenges enabled both the parties to come an agreement for a fraction of the previous price. Majorly, the building-owners do not own the ground beneath the property and pay rent on the land to the Copper Union school. According to Copper Union’s financial document, the annual ground-lease rent jumped from $7.75 million to $32.5 million in 2018 and will go up to $41 million in 2028.
The tower also has a reported 37,161 sqm of space that is vacant or will become available in the coming years which could further require another $200 million investment in the building to attract new tenants, according to sources, said WSJ.
Aby Rosen, co-founder of RFR Holding emerged the winner a after competitive bidding process, which saw developers such as Ashkenazy Acquisition Corp. and RXR Realty participate as well. The building’s sellers were represented by Darcy Stacom and William Shanahan from real estate services firm, CBRE Group, added WSJ.