Aby Rosen is no longer planning a hotel for the Chrysler Building

“You work things out,” he said of the ground lease

New York /
Apr.April 18, 2019 09:35 AM
The Chrysler Building at  405 Lexington Avenue and RFR Holding's Aby Rosen (Credit: Getty Images)

The Chrysler Building at  405 Lexington Avenue and RFR Holding’s Aby Rosen (Credit: Getty Images)

As the new owner of the Chrysler Building, Aby Rosen is weighing his options — and a hotel is no longer one of them.

The RFR Holding head previously considered bringing in a hotel but has since nixed the idea, Bloomberg reported. Rosen reaffirmed his goal to bring back the Cloud Club, which operated as a speakeasy during prohibition and expand amenities available for the public — including restaurants and hair salons.

Rosen noted that the building has to maintain its cultural value, adding that the ground lease, which some predicted would be an obstacle to a sale, could be managed.

“The Chrysler Building is one of the finest and most recognizable New York City architectural assets -– I only invest in quality and take on the responsibility to rehabilitate and maintain these cultural gems,” Rosen said. “As far as the land lease, you work things out.”

Ground leases have been thorns in RFR’s side before. In 2015, the developer defaulted on a loan for the Lever House, another landmark Manhattan skyscraper. The debt sold earlier this year for a significant loss, the report said.

Rosen and partner Sigma Holding GmbH struck a $151 million deal to acquire the historic Art Deco property from the Abu Dhabi Investment Council, which bought a 90 percent stake a decade ago from Tishman Speyer for $800 million. Rosen and his Austrian partner will need to perform hundreds of millions of dollars in upgrades to the property.

Abu Dhabi struggled with escalating ground lease payments — which rise to $41 million in 2028 — to Cooper Union, as well as increased competition and changing tenant preferences in the office market. [Bloomberg] — Meenal Vamburkar


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