Tishman Speyer Finalizes Chrysler Building Ground Lease

Tishman Speyer and The Cooper Union for the Advancement of Science and Art have finalized a 150-year ground lease for the Chrysler Building at 405 Lexington Ave. in Manhattan. The agreement includes a $235 million investment as well as ground-lease payments to Cooper Union.

PSP Investments is the lead investor in the transaction. Tishman Speyer plans to reposition the 1.3 million-square-foot tower, with the partnership using 100 percent equity to finance the ground lease and redevelopment.

Cooper Union has owned the land beneath the Chrysler Building since 1902, when it was granted to the school by Peter Cooper’s children.

The repositioning will include a new amenity program on the building’s 61st floor, featuring a lounge with outdoor access, gathering space and food and beverage options. A second wellness-focused amenity program is planned for the building’s underground arcade.

Tishman Speyer previously acquired the Chrysler Building as part of a $220 million portfolio transaction in 1998, according to Yardi Matrix. In 2001, PGIM Real Estate acquired a 75 percent interest in the property from Tishman Speyer for $300 million, valuing the asset at $400 million.

In one of the top-performing office markets in the U.S., Tishman Speyer plans to prebuild ready-to-occupy suites in 75 percent of the property’s vacant and soon-to-be-vacant space, allowing tenants to move in faster. The company used the same strategy at its 6 Grand Central Tower.

The Cooper Union was advised by Steve Klein, partner at Gibson Dunn, and David Heller, vice chairman of the Capital Markets Group at Savills North America.