Ever since RFR lost the Chrysler Building a year ago, one of the biggest questions in New York real estate has been who will take over the iconic skyscraper. Cooper Union, which has owned the land on which the office tower was built for more than 100 years, has been looking for a new lease-holder for the coveted trophy since last spring. RFR’s ownership came to an end after it defaulted on ground-rent payments, which are set to go up again soon. The steep rent and the shabby condition of the building, which significantly increases the overall costs of taking it on, have warded off other would-be buyers.
Until now, perhaps. Crain’s has reported that Tishman Speyer, which owned Chrysler’s ground lease between 1997 and 2019, is in advanced talks to take the building back. The last major building overhaul, in fact, was done in 2000 by Tishman, who nine years later sold a 90 percent stake to the Abu Dhabi Investment Council for $800 million. The main sticking point for the negotiations are the terms of the new ground lease. The current rent, which is $32.5 million, and set to increase to $41 million in 2028, is widely acknowledged to be impossible — the office rents the the building can command do not approach anything near that amount. And that’s aside from the money that the next owner will have to sink into repairing and upgrading the antique building, expected to be well over $100 million.
