Manhattan’s iconic Chrysler Building may be changing hands, at least a stake of it.
Signa Holding, a major Austrian real estate developer with ownership in luxury department stores and other properties in Europe, has been ordered by an Austrian court to sell its stake in the Chrysler Building, among other assets, as part of the equivalent of bankruptcy proceedings, according to media reports.
The order to sell the Chrysler Building is part of the restructuring plan for the firm founded by retail magnate Rene Benko, according to The Wall Street Journal, adding Signa’s plan has been approved by judicial authorities.
Signa’s planned sale of the Chrysler Building, completed in 1930 and once the tallest building in the world, comes as it’s in dire need to raise cash, the Financial Times reported. Since its insolvency proceedings began last month, about 1.1 billion euros of claims have been filed among over 5 billion euros it owes to creditors, Financial Times said.
Signa bought the Manhattan landmark with New York developer RFR Holding in 2019 for $151 million from an ownership group that included the Abu Dhabi Investment Council, Tishman Speyer and Prudential Financial, which had spent about $720 million for the property in 2008, according to CoStar data.
The landmarked skyscraper also has been hurt by rising annual rents for a ground lease its owners have to pay to The Cooper Union private college, according to Financial Times, adding that the annual ground lease rent for the building had shot up to $32.5 million in 2019 from $7.5 million in 2018 and is expected to increase to $41 million in 2028. RFR has been seeking to restructure the ground lease with The Cooper Union in hopes that a lower ground lease rent would help free up money to overhaul the building, Financial Times said.
Signa spokespeople didn’t immediately respond to a CoStar News request seeking comment. A spokesperson for RFR declined to comment.
The 1.26-million-square-foot building, across from the Grand Central Terminal transit hub, has a vacancy rate of 12.6%, below the nearly 16% rate of the Grand Central market and New York’s average of 14%, according to CoStar data. Flexible workplace provider IWG’s Spaces concept is the largest tenant at the building with more than 138,000 square feet occupied, CoStar data shows.