Ah, the Chrysler Building. That unmistakable art deco beauty gracing the New York skyline, like a perfectly coiffed silver fox in a city of glass boxes. You know the one—shiny spire, looks like it belongs in a 1930s superhero comic, the building that was briefly the tallest in the world before the Empire State Building came along and rudely knocked it off its perch. Well, that same iconic skyscraper is now caught in a real-life drama that could see it changing hands… again.

Now, let me tell you, if the Chrysler Building had a theme song, it would probably be something dramatic. Maybe something out of a soap opera. Because, folks, this office tower’s ownership saga is about as juicy as real estate gets.

Ground Rent Drama: Cooper Union to the Rescue?

Here’s the tea: The land under the Chrysler Building—yes, the ground it literally stands on—is owned by Cooper Union, a school that’s been around for nearly as long as the building itself. Cooper Union recently dropped a bombshell: the folks leasing the land from them, a partnership led by RFR Holding, have missed a whopping $21 million in ground rent payments. Yep, $21 million. That’s a lot of lunch money.

Since May, RFR Holding has been ghosting on their rent, and Cooper Union decided enough is enough. John Ruth, the school’s VP of finance (and probably the person you don’t want to mess with when it comes to late rent), declared that Cooper Union would be taking control of the Chrysler Building. They’ve even hired real-estate heavyweight Cushman & Wakefield to manage the place.

Now, as much as I’d love to tell you Cooper Union has some grand plan to turn the Chrysler Building into, I don’t know, the world’s coolest dorm room, they’re staying mum about what’s next. Maybe they’re secretly planning to convert it into a campus for students. Could you imagine—your dorm is the Chrysler Building? I’d never skip class again.

RFR Holding Isn’t Going Down Without a Fight

Of course, this wouldn’t be New York if there weren’t some legal fireworks. RFR Holding, led by Aby Rosen and Michael Fuchs, isn’t just rolling over and handing over the keys. Oh no. They’ve lawyered up and filed a lawsuit to block Cooper Union from taking over. Their attorneys, Terrence and Darren Oved (probably two guys you don’t want to face in a courtroom), have said that while they’d like to settle things quietly, they’re ready for a courtroom battle if necessary.

In short, this is shaping up to be one of those legal tug-of-wars where both sides hunker down for a long, drawn-out process. And honestly, with $21 million on the line, I can’t blame them for wanting to duke it out.

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The Office Market Meltdown Strikes Again

Why is all this happening? Well, buckle up, because here comes the bad news: the office market isn’t exactly thriving these days. New York City’s office sector has been about as lively as a soggy bagel since the pandemic hit. High interest rates, the rise of remote work, and the “will-they-or-won’t-they” return of workers to office buildings have made owning office space about as fun as juggling flaming chainsaws. It’s rough out there.

And the Chrysler Building? Well, it’s been feeling the full brunt of this collapse. Even though it’s one of the most iconic skyscrapers in the world, its art deco charm hasn’t been enough to keep up with the shiny, modern office towers that have been sprouting up all over Manhattan. It’s like trying to sell an antique typewriter to someone who’s addicted to texting. Sure, it’s cool, but is it practical?

A Rocky Road for RFR

Let’s rewind a bit. RFR Holding and its Austrian investment partner, Signa Holding, bought the Chrysler Building in 2019 for about $150 million. Sounds like a steal, right? After all, this is the Chrysler Building we’re talking about—prime Manhattan real estate with a big, shiny spire on top!

But it turns out, even at $150 million, they were walking into a financial minefield. One major obstacle? The ground lease. Back in 2019, the lease was already a hefty $32.5 million per year, and it was set to keep climbing like your favorite rollercoaster, heading toward $41 million by 2028. Add to that the fact that the office market was already in a slow decline, and it’s no wonder this deal started to feel a bit shaky.

Then, in classic 2020 fashion, the pandemic hit, and demand for office space took a nosedive. RFR had plans to spruce up the Chrysler Building, maybe bring in some higher-paying tenants, maybe even add a hotel! But COVID said, “Not today!” and all those plans were put on ice.

$150 Million in Improvements and Still Struggling

To give credit where it’s due, RFR didn’t just sit on their hands. They invested a cool $150 million to fix up the building and cover tenant shortfalls. Imagine throwing that much cash into a project, only to find yourself still fighting to keep it afloat. Talk about an expensive hobby.

At one point, RFR even considered adding a hotel to the building, but that idea was eventually shelved. Apparently, even in the city that never sleeps, there wasn’t enough demand for another place to stay.

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Enter René Benko, Exit René Benko

RFR’s financial troubles didn’t stop there. Their Austrian investment partner, Signa Holding, led by billionaire René Benko, started defaulting on other debts. Austrian courts eventually ordered Benko to sell his stake in the Chrysler Building. That’s like playing Monopoly, landing on Boardwalk, and being told you have to sell it because you ran out of money for hotels. Ouch.

And the hits just kept on coming. This past August, RFR got slapped with a foreclosure lawsuit on another office building they own at 475 Fifth Avenue. Things have not been looking good for RFR, to say the least.

What Happens to the Chrysler Building Now?

So, what’s next for the Chrysler Building? Well, that’s the million-dollar (or maybe $21 million) question. For now, Cooper Union holds the upper hand, and RFR is scrambling to hold onto the building. Spaces, a co-working company, is currently the largest tenant in the building, but if you check out the Chrysler Building’s website, you’ll see plenty of office space up for lease. The place is far from fully occupied, and in today’s market, that’s a tough pill to swallow.

But one thing’s for sure: the Chrysler Building, like the city it calls home, is a survivor. It’s been around since 1930, it’s seen the Great Depression, it’s seen wars, it’s seen countless ups and downs. Whether it stays under RFR’s control or becomes Cooper Union’s prized possession, the Chrysler Building will keep on standing tall, spire gleaming, as a symbol of New York’s resilience.

Who knows? Maybe in a few years, it’ll get a new lease on life—literally—and we’ll be talking about the Chrysler Building’s next big chapter. After all, if there’s one thing we’ve learned from New York real estate, it’s that no story is ever truly over.

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