Tishman Speyer has secured a 150-year ground lease for the Chrysler Building, marking its return to the iconic Art Deco skyscraper seven years after selling its stake. The developer and Cooper Union, the landowner of 405 Lexington Avenue, announced the deal on Wednesday.
The agreement includes a $235 million investment from Tishman and its partners, including Canada’s PSP Investments. The firm and its partners are using equity to finance the ground lease and improvements to the building.
Updates are expected to include refreshed amenities in the underground arcade and on the 61st floor, a restoration of the facade, and the design of ready-to-occupy office suites for a majority of the vacant or soon-to-be vacant spaces.
“Just as we have done through new developments like The Spiral and our continuous reinvention of Rockefeller Center, we will create an environment that will make our customers proud and excited to work here every day,” CEO Rob Speyer said in a statement.
A representative for Tishman declined to comment on the annual rent payments, though the ground rent was expected to hit $41 million in two years, according to a previous financial statement from the college.
Tishman acquired the Chrysler Building in 1997 for $220 million. Over the next couple of decades, it sold off its stake in the building over multiple transactions, including a 2008 sale that valued the building at $800 million. In 2019, the building, including Tishman’s final 10 percent stake, was sold to RFR and Signa Holding for $150 million.
But Signa went bankrupt and last January, a judge terminated RFR’s ground lease at the property, ejecting it from the skyscraper and leaving Cooper Union looking for a leaseholder; Tishman emerged as a frontrunner in January.
SL Green’s Marc Holliday expressed interest in acquiring the property a year ago, but his interest reportedly cooled. Savanna, a Midtown office owner that’s been making moves left and right, was also interested in the building and Jeff Gural’s GFP Real Estate held advanced discussions with Cooper Union about acquiring the ground lease as recently as March, The Real Deal reported.
The tenant roster includes law firm Moses & Singer, Creative Artists Agency and architect Ted Moudis, but the building has faced complaints about elevator outages and mice. The vacancy rate of the 1.3-million-square-foot building was 14 percent, CoStar reported at the start of the year.
