(Reuters) – Signa Holding GmbH, Austria’s largest privately owned real estate company, will buy the iconic Chrysler Building in New York City in partnership with property firm RFR Holding LLC for about $150 million, people familiar with the matter said.
FILE PHOTO: New York City’s iconic Chrysler Building that was opened in 1930 on East 42nd Street is seen in Manhattan, New York, U.S., January 9, 2019. REUTERS/Mike Segar/File Photo
Signa and RFR are equal partners in a joint venture that signed an agreement on Friday to buy the building from the Abu Dhabi Investment Council at a fraction of what it paid to own it, the sources said.
Abu Dhabi had splashed out $800 million to own a 90 percent stake in the Chrysler Building at the onset of the 2008 financial crisis. Property values subsequently crashed, and in some cases never fully recovered.
The sources asked not to be identified as they were not authorized to speak publicly about the matter. Signa Holding and CBRE, which has handled the sale process of the asset, declined to comment. RFR did not immediately respond to a request for comment.
The art-deco tower, which was the world’s tallest building when completed in 1930 only to be eclipsed by New York’s Empire State Building, is considered a crown jewel of the city’s skyline. Its old age is fueling maintenance costs, however, and its historical status has often made modifications to the needs of its tenants difficult.
Weighing on the sale price was the rent that the Chrysler Building has to pay to the Cooper Union school, because it does not own the land underneath the property. The annual rent increased to $32.5 million in 2018 from $7.75 million in 2017. The lease will increase to $41 million in 2028, according to financial statements from Cooper Union.
The deal marks Signa’s debut in the U.S. property sector. Led by its founder Rend Benkoe, Signa has a sprawling real estate and retail portfolio in Europe. Its real estate assets are worth more than 14 billion euros ($16 billion), while its development projects have a gross asset value of over 8 billion euros, according to its website.
Signa is no stranger in investing in numerous landmark buildings in prime locations. Its holdings include KaDeWe and the Upper West Tower in Berlin, Goldenes Quarter with the Park Hyatt Hotel in Vienna, Alte Akademie in Munich, and Alsterhaus and Alsterarkaden in Hamburg.
Founded in 1991 by Aby Rosen and Michael Fuchs, RFR made its name in real estate by owning and managing some of Manhattan’s most prestigious office properties, including the Seagram Building and Lever House, which are located on Park Avenue.
Signa and RFR have done deals together in the past, including in 2017, when Signa agreed to buy five landmark properties from RFR in Berlin, Hamburg, Frankfurt and Munich for about 1.5 billion euros.
The Real Deal had earlier reported RFR’s role in the deal for the Chrysler Building.
Reporting by Gregory Roumeliotis and Harry Brumpton in New York; Additional reporting by Herb Lash