From the outside, the Chrysler Building, with its iconic chrome-nickel spire, may be the city’s most glamorous piece of architecture. Now, a new owner is toying with a plan to lure visitors to the building... by adding a hotel.
New York developer Aby Rosen, who heads RFR Holding LLC (which just purchased the building at a big discount), has told Bloomberg he would consider converting the 77-story office skyscraper into a hotel. Real estate insiders believe the final product would likely be a mix of office and hotel space.
After being put on the market in January, RFR Holding and Austrian real estate firm Signa Holding GmbH last week reportedly struck a deal to buy the Chrysler Building for $151 million, a more than 80 percent discount from the last purchase price. In 2008, the Abu Dhabi Investment Council forked over $800 million for a 90 percent stake in the tower. But a slew of evacuating tenants as well as a pricey land lease held by Cooper Union — currently $32.5 million a year but set to jump to $41 million in 2028 — have made this NYC icon a risky bet for any investor.
The losing bidder, Scott Rechler’s RXR Realty, was said to have offered $1 million less for the building.
It comes as no surprise that the Chrysler Building is facing an existential crisis of sorts. The office tower is reportedly losing about $20 million a year and has around 400,000 square feet of space that’s either available now or in the next year. At the same time, the rezoning of East Midtown has spurred several demolitions to make way for new developments. Near Grand Central, the under-construction supertall One Vanderbilt is expected to draw top-tier office tenants.
A makeover of the Chrysler’s interiors into a hotel could cost between $150 million and $250 million, according to a Bloomberg source.
“If anyone can do it, it’s Aby Rosen,” said James Emden, a veteran commercial property broker at Compass. “He’s done it before, and he’s qualified.”
Emden said it’s possible that Rosen could try to renegotiate the terms of the land lease, which runs through 2147.
Within the industry, Rosen is known as "the turnaround artist" of real estate.
In 2006, he was part of team that spearheaded a $200 million gut renovation of the Gramercy Park Hotel. He also bought into the Lever House at 390 Park Avenue, another prized piece of architecture, but has reportedly run into trouble refinancing his debt.
RFR also owns the Seagram Building, the former home of the famed Four Seasons and a landmark, both the outside and inside, a fact that made it expensive and time-consuming to restore and maintain.
Along with the exterior, the lobby of the Chrysler Building is also landmarked, which might make it difficult for Rosen to create a dedicated entrance for hotel guests.
Built in 1930, the 1,046-foot Chrysler tower was initially panned by critics who viewed its ambition to be the tallest building in the world at the time as gimmicky. But the art deco design, as well as its height-boosting (and apparently accessible-by-ladders) spire, is now considered a masterpiece of modern skyscraper construction.
In January, architecture critic Paul Goldberger said in a tweet that the Chrysler Building is "one of the most glorious pieces of architecture ever created—and still the most beloved skyscraper in New York."
I wish this piece weren’t correct, but it is. There is little market demand for the Chrysler Building, one of the most glorious pieces of architecture ever created—and still the most beloved skyscraper in New York. https://t.co/NXjH3bT9sq
— Paul Goldberger (@paulgoldberger) January 12, 2019