Once the tallest building in the world, New York’s landmark Chrysler Building will be sold for a fraction of the price it was purchased for, according to media reports citing sources familiar with the deal.
Property firm RFR Holding LLC, which owns a number of prestigious buildings in Manhattan, along with a foreign partner is poised to buy the skyscraper for around $150 million, the Wall Street Journal reports. While the report did not name the second party in the deal, Reuters said it is Signa Holding GmbH, Austria’s largest privately-owned real estate company.
An agreement to buy the Chrysler Building from its current owners, the Abu Dhabi Investment Council, was reportedly signed on Friday. The building was placed on the market around two months ago.
In 2008, just before the stock market plummeted, the investment arm of the Government of Abu Dhabi spent $800 million to purchase a 90-percent stake in the art-deco tower, which boasted the title of tallest building in the world for less than a year before New York’s Empire State Building stole the crown in 1931.
The huge drop in price is partly explained by the fact that the deal does not include the land beneath the property, which is owned by Cooper Union art school. This means the buyers will have to pay the school a hefty sum for the ground rent, which stood at $7.75 million a year in 2018 and rose to $32.5 million this year. It will reportedly grow to $41 million in 2028.
Another challenge for the new owners will be attracting new tenants, which may entail a roughly $200 million investment. Around one-third of the 77-story tower is vacant or will become so in the coming years, and the building might need significant upgrades to be appealing to customers.
The Chrysler Building, with its metal eagle statues placed around the building, is among the most recognizable in the world even for those who have never been to New York. It has been featured in blockbuster films such as Men in Black 3, Spider Man, and Armageddon among others.