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The Chrysler Building, a well-known skyscraper in New York City, was recently sold at a discounted price.
Built in 1930, the building was considered as the world’s tallest structure at the time. The building was declared a National Historic Landmark, a property that showcases the rich history and culture of America, in 1976. Many architects perceive it as New York’s greatest building.
In 2008, the Abu Dhabi Investment Council bought a 90% stake of the Chrysler Building for $800 million.
However, early this year, Austria’s largest real estate company Signa Holding and New York-based firm RFR Holding reportedly bought the building for only $150 million.
The building was sold at a huge discount because the deal did not cover the annual rent of the land where the structure stands. Cooper Union art school, the land’s owner, significantly increased the rent over the years. The initial amount of the lease was $7.75 million a year. This amount eventually became $32 million in 2019 and is expected to increase again to $41 million in 2028.
Aside from paying an expensive rent for the land, potential new owners of the Chrysler Building are expected to face more challenges. As the building currently has a low occupancy rate, new owners need to lure more tenants. However, the owners will have to make the spaces more competitive in the market since the building is competing with more modernized office towers, which offer more up-to-date amenities, in the area. Because of this, an investment of around $200 million will be needed to renovate and upgrade the Chrysler Building.