The collapse last week of Aby Rosen’s Chrysler Building partner, Austrian property mogul Rene Benko, couldn’t come at a worse time for the landmark skyscraper.
According to sources, Rosen’s RFR and Benko’s Signa were finally making progress on stalled talks to restructure their long-term ground lease with Cooper Union, which owns the land under the tower.
“They were talking almost since the time when they bought the leasehold from Tishman Speyer for $151 million in 2018,” one source said.
The huge ground lease rent was the reason for the low purchase price.
The ground lease went up from just $7.75 million in 2018 to $31.5 million this year, and is to rise to $41 million in 2028.
“It was off and on,” one source said of the talks. “But they were making real progress recently.”
The Chrysler Building is believed to be between 70% and 80% leased.
Asked to comment on the Chrysler Building’s current tenant roster and on talks with Cooper Union over the ground lease, Rosen had a one-word answer to each: “Can’t.”
But while Rosen is clearly in a pickle, it doesn’t necessarily mean he can’t find another partner to replace Signa.
Rosen has extricated himself from many a previous crisis. As Fried Frank real estate chairman Jonathan Mechanic put it, “I would never count Aby out.”
Mystery shrouds the southwest corner of Fifth Avenue and East 47th Street, where South Korean apparel firm SAE-A recently filed plans to demolish its 11-story building at 576 Fifth.
But what the company hopes to do at the site remains unknown. It didn’t respond to requests for comment.
We reported in 2021 that SAE-A paid, or overpaid, $101 million for the now-empty jewelry building. The purchase was a surprise as SAE-A isn’t known mainly for real estate; it’s one of the world’s largest apparel manufacturers with plants in Asia and Central America.
The acquisition threw a monkey wrench into Extell chief Gary Barnett’s aim to assemble the entire Fifth Avenue west side blockfront between East 46th and 47th streets. Extell is still mulling which of two possible office and/or hotel projects for which it filed plans with the Department of Buildings.