
It’s easy to see why the Chrysler Building was irresistible to Aby Rosen. The flamboyant German émigré who heads up real-estate firm RFR Holding is clearly drawn to gorgeous has-beens. Over the past three-and-a-half decades, alongside his childhood friend Michael Fuchs, he’s built a glamorous empire of revamped trophies — Lever House, the Seagram Building, and the Gramercy Park Hotel, among others, renovating not just the space itself but bringing in celebrity chefs and filling their lobbies and courtyards with work by Damien Hirst, George Condo, and Andy Warhol.
The Chrysler is among the few buildings in the Manhattan skyline to which the word iconic can be non-ironically applied, so when the opportunity to buy the sublime Art Deco confection came up, Rosen took it. “I see the building as a Sleeping Beauty: It needs to be woken up and revitalized,” he told the New York Post in 2019, shortly before he bought the Chrysler with Austrian real-estate firm Signa Holding. It was an apt pairing: With its steel gargoyles, Moroccan marble lobby, and illuminated spire (a feature that, unveiled in a surprise flourish in 1928, allowed it to snatch the title of tallest building from 40 Wall Street), The Chrysler is unabashedly over the top, much like Rosen himself, who is known for his celebrity-laden parties at Art Basel and decorating his kids’ bedrooms with Basquiats. Besides, how could he resist grabbing it for $151 million — a fraction of the $800 million that the Abu Dhabi Investment Council had paid for a 90 percent stake a decade earlier?
“I remember reading the headline when Aby bought it and thinking, How could it have sold for just that?” says an executive at a prominent real-estate-investment firm. But it came with a big catch: Cooper Union, the private art and engineering college — itself a New York institution that for most of his history has offered free tuition, subsidized by the Chrysler — owned the ground underneath it, and the terms of the ground lease were widely acknowledged to be impossible. In 2018, shortly before RFR bought the building (a deal also included an adjacent retail property, the pyramid topped Trylons), the rent jumped from $7.78 million to $32.5 million a year, and was set to increase to $41 million by 2028. The office rents the building commands weren’t high enough to cover it, let alone the cost of upgrading and maintaining the building itself, long considered to be a charming money pit. “How much of a plan did they have, or was it just some dumb money from this guy in Europe?” says another real-estate insider.
So when Rosen lost control of the Chrysler this October, after falling $21 million behind on rent, it struck many in New York real-estate circles as inevitable. Which isn’t to say they weren’t riveted. “What a saga!” a developer tells me of watching Rosen and Cooper Union battle over the landmark. And the loss of the Chrysler, a risky bet even before the office market crash, is only the most recent high-profile hit Rosen has taken in the last few years. He lost the Lever House ground lease in 2020 and the Gramercy Park Hotel in 2022. As his friend André Balazs once told this publication “Aby is always bullish; that’s part of his charm.” But the last few years were a terrible time to be bullish in the office market, especially the market of older, complicated buildings on ground leases. “RFR has always been an overpayer,” says a commercial broker. They put some lipstick on the pig, some art in there, try to leverage it. But right now, it’s not panning out in a number of his buildings.”
The Chrysler, an antique skyscraper that even before the pandemic wasn’t able to compete for rents with the blue-chip buildings on Park Avenue, has lured other investors into trying to make a go of it before Rosen — sometimes to their detriment. (“It was a big gamble for us,” Sol Goldman, one of the owners who bought it in the 1960s and lost it in the ’70s, told the New York Times back then. “We laid awake many a night over it.”)
Built in 1928 by car magnate Walter P. Chrysler, who took over the development project and got architect William Van Alen to replace the planned Moorish terra-cotta topper with a simplified chrome-steel crown, the building was brashly commercial from the start. And for a few decades, it was a piece of top-tier real estate. Executives congregated in the Cloud Club on the 66th through 68th floors — a long-shuttered former speakeasy that Rosen intended to revive — dining on dover sole and enormous No. 18 pink grapefruits. But by the 1970s, Texaco and other office tenants were fleeing to the suburbs, operations and maintenance costs were rising, and the building fell into foreclosure. The Chrysler entered a decades-long cycle of rebirth and decline, garnering a Times story about its triumphant restoration every 20 years or so. Not everyone spun out on it, though: Tishman Speyer, one of the most well-regarded real-estate firms in the city, bought it out of foreclosure in the late 1990s, poured $100 million into it, and turned a nice profit, continuing to hold on to a 10 percent stake and manage the property until it sold to Rosen.
“Everyone in the business knows it’s a pretty haggard asset,” a developer told me. “It’s chopped up into pretty tiny offices, there are columns, inflexible floor plates, cranky HVAC systems, aging infrastructure, small leases.” Tenants at the time included consulting and law firms, financial advisory and investment firms, as well as the usual mélange of random, oddball businesses. The most valuable space at the top also had the smallest floor plates — floors in the 60s hover around 5,000 square feet. It’s also landmarked, including parts of the interior, adding cost and complication to work.
Rosen was undeterred. A person with knowledge of the deal told me that the developer thought it would take three to five years to stabilize the building, re-open the Cloud Club, and draw new tenants and higher rents. A friend of Rosen’s told Bloomberg that the developer was obsessed in the weeks before the deal closed: During a two-week vacation dog-sledding in Norway, skiing in Japan, and snorkeling in St. Barts, he talked about the Chrysler every day.
Ground leases, while a not uncommon feature of New York City office buildings, are often tied to the market value of the land, and can render a building virtually worthless when they reset. While leaseholders like RFR often sign 99-year leases, the relationship with the land owner is as significant as any legal document, and everyone I spoke with thought the Chrysler’s lease made the economics of the deal unworkable. Still, Rosen is known for being a resourceful operator, and drawing high-profile collaborators and tenants with his reputation; it seemed just possible that he could have turned it around. “The level of risk with the rent going from $8 million to $30 million made it a high-wire act,” says one executive. “You’re going to be racing to make that up, spending your own money to try to get the building into shape so you make the rent.”
RFR, which declined to be interviewed for this article, also seemed to think it could get Cooper Union to renegotiate the ground lease — someone with knowledge of the deal told me that in addition to a comprehensive restoration, RFR’s plan always involved renegotiating the ground lease to something economically feasible and financeable. “As far as the land lease, you work things out,” he told Bloomberg in 2019. (Tishman Speyer, according to a Times story, was of a different opinion, and thought that Cooper Union would never cut a deal.)
Still, at least at first, Rosen’s plan seemed to be going well. He told the Post in 2019 that he was in talks with the Major Food Group and restaurateur Stephen Starr (he was considering multiple restaurants for the space — a food court, a café, an upscale restaurant in the Cloud Club), that he wanted to replace the workaday retail — a barber, a deli, a locksmith — in the arcade to Grand Central with something more elevated. Architect David Rockwell was going to do those designs with architect Ken Fulk taking on the Cloud Club and observatory on the 61st and 62nd floors, where photographer Margaret Bourke-White had kept an office. Rosen filed plans with the Landmark Preservation Commission to install a glass safety wall in front of the perilously low barrier flanked by chrome eagles.
In 2020, an amenities floor opened with nice lighting, a pool table, meditation room, and attractive, comfortable furniture. They weren’t exactly the showy features other developers were using at the time to lure tenants to high-end office buildings, but these were just Rosen’s early offerings. A spa and fitness center were in the works, a total of 100,000 square feet of amenities planned. In all, RFR claims it spent $170 million on repairs and plans to upgrade the building, which included window replacements, elevator upgrades, and soft costs like paying for architectural designs. (Cooper Union estimates that it was more like $80 million but admits it’s hard to say for sure.) Many real-estate watchers assumed that Rosen, backed by Signa, must have had the capital to pour a steady stream of cash into the money-losing asset until it turned profitable. Cooper Union, which later accused RFR of misrepresenting its financial situation, seemed to think so, too.
But things went sideways during the pandemic, when the demand for office space plummeted, leaving Manhattan with some 100 million square feet of vacancies. Rosen tried to work out new ground-lease agreements with Cooper Union, according to sources familiar with the negotiations, and did in 2021 and 2023. One of these, according to sources, involved paying Cooper Union a lump sum of around $300 million to bring the rent down to less than $15 million a year, with some periodic escalations and a revenue-sharing agreement. One source said that RFR was unable to raise the capital to close the deals, but RFR says that the real issue was that Cooper Union wouldn’t adjust the rent to a level that was economically sustainable and reflected the changing commercial-real-estate market. The bad luck didn’t end there: Signa, his partner in the Chrysler and one of the largest real-estate investors in Europe, went into bankruptcy last November, leaving RFR to carry the property financially. RFR ultimately bought out Signa for an undisclosed sum.
A real-estate source familiar with the building estimated that, by this point, Rosen must have been losing a little over $1 million a month to operate the building. By the time Cooper Union moved to oust RFR in September, the firm owed $21 million in rent.
By then, much of RFR’s Manhattan office portfolio was in one kind of trouble or another: fending off foreclosure, struggling with high vacancy, or facing a daunting amount of debt coming due. Earlier this fall, Crain’s put the number of troubled office properties in RFR’s Manhattan portfolio at 11 out of 14. (RFR, for its part, disputes that it had the terrible year that Crain’s claims it did: In New York, it had the $560 million sale of 980 Madison Avenue to Bloomberg Philanthropies and the $46 million sale of 102 Greene Street in Soho to Cartier, among others. The company’s portfolio also includes more than 100 properties worldwide, not just New York offices.) Still, there were vacant or largely vacant flagship properties — the Gothic jewel box at 281 Park Avenue that Fotografiska, its sole tenant, left eight years before the end of its lease. There is also the $1 billion loan coming due on the Seagram Building next spring. And the trophies he’d already lost: the Lever House, whose ground lease RFR had been forced to give up, after defaulting on a loan following a steep rent reset. (The Korein family, who owned the land, allegedly annoyed at Rosen over his handling of another lease, wouldn’t negotiate a deal, making refinancing impossible.) Then, surprisingly given RFR’s reputation as a masterful repositioner of historic buildings, his role in the possibly permanent closure of the Gramercy Park Hotel, which he claimed the pandemic had rendered “worthless,” shuttered and stopped paying rent on the ground lease. Solil Management, which owns the land beneath the hotel, claimed in court filings that he’d let the hotel “deteriorate to a shocking degree” leaving it in “poor repair,” with HVAC equipment “patched with duct tape.” After the hotel’s historic contents were auctioned off, the Post accused Rosen of “ruining” the hotel and getting “away with it.”
Even so, no one I talked to thought the Chrysler situation would sink Rosen, even if he’s had a bit of a bad streak. One real-estate lawyer pointed out that it’s hardly unusual to lose, or to walk away from, an unviable office building right now (although Rosen’s portfolio does have a lot of them). “A lot of real estate is luck, having the right product at the right time,” the lawyer says. “And he got caught holding the wrong product at the wrong time.” He’ll also be able to brush the dust off because, as another industry heavy told me, he’s loaded. That helps. “He owns probably half a billion dollars’ worth of art,” says one developer. “I think he’s structured for these eventualities.”
Through it all, RFR has fought to hold onto the Chrysler, using legal arguments that the judge on the case with Cooper called “the flimsiest of the flimsy,” before handing control of the property back to Cooper, which now collects rents and has hired Cushman & Wakefield and Savills to oversee leasing and advise on its transformation. (In one such argument, RFR claimed Cooper Union’s handling of an Israel Palestine campus protest had “profoundly disturbed” members of the real estate community, who “inextricably” associate Cooper Union with the Chrysler, resulting in tenants vacating tens of thousands of square feet of office space.)
And really, who could blame Rosen for wanting to keep it? In early November, a few weeks after Cooper Union’s court victory, I toured the property with several of their representatives, who were eager to convince me of the Chrysler’s potential. As I rode up to the 61st floor in the warm-toned, inlaid wood elevator, it was easy to see why the office tenants I spoke with described the building with a kind of awe. Or why Rosen took the gamble on the ground lease. The Chrysler speaks to an era when an office in Manhattan was not just a place you had to be, or could with the right perks be induced to sort of want to be, but an exciting place in and of itself.
At the moment, however, it’s half empty. (Cooper Union says that the building is more than 60 percent leased, but one Midtown landlord told me that “tenants were fleeing left and right,” including several who’ve moved to his building. “Even if it’s 60 percent today, it might be 50 soon.”) All the shops in the arcade leading to Grand Central were vacant when I visited, the windows papered over, the high-end florists, cobblers and barbers of the city transacting their business elsewhere. The ground-floor retail was also empty, the last of the stores, an Amazon Go, having closed for its own reasons. It was gloomy and majestic, a sleeping beauty still.
Nearby, however, the sluggish office market has woken up. The Grand Central office market is now among the most robust in the city, with an average Midtown rent of $80.12 per square foot, according to Compstak. Nearby, you can see One Vanderbilt, whose top floors were rented for $300 per square foot in 2022, and the bulk of the soon-to-open JP Morgan Chase building on Park Avenue. The Chrysler, meanwhile, is lagging at an average $67.70, despite its pedigree. Turning it around will be significantly more difficult than it would have been a few years ago. “The economics on these older class A-, B+ buildings are becoming really tenuous because the construction costs are so high,” says a developer. The owners of the Empire State building, of a similar vintage and standing, did a massive renovation and repositioning in 2019, and managed to attract higher credit tenants than the dentists it was once famous for. The same could be done for the Chrysler, but it’s a far more expensive proposition now than it would have been a few years ago. “Sometimes when a building doesn’t feel cared for, it gains a reputation and needs a fresh spirit,” one office landlord told me. “But there’s a whole universe of tenants that would love to be in the Chrysler building.”
A final judgment on the fate of the Chrysler has yet to be made, and RFR seems hopeful that it might be able to win the building back yet. “RFR is the ideal steward for the Chrysler and our hope is that Cooper Union will soon make this realization,” the company wrote in a statement. Whoever owns it next will almost certainly have the benefit of a more favorable deal than Rosen — most likely some kind of profit sharing agreement with a modest ground rent, according to people I spoke with. The shame of it is that a lot of people really would have liked to see Rosen’s Chrysler — to sip a cocktail at the Cloud Club and see the city spreading out beyond the steel eagles from an elegant observatory, re-opened for the first time since 1945. Rosen’s big bet may have faltered but the vision was so full of life. Aby Rosen’s Chrysler — a building returned to its original swagger. As one broker put it, “Who wouldn’t want to go there?”