Abu Dhabi Fund Puts New York's Iconic Chrysler Building Up For Sale
Forget about buying the Brooklyn Bridge. An Abu Dhabi wealth fund is trying to offload another piece of iconic New York City real estate.
In what appears to be the latest consequence of the cooling in New York City's commercial real-estate market over the past two years, the Abu Dhabi Investment Council is hoping to offload its 90% stake in the iconic building - which was briefly the tallest building in the world after its completion in 1930, until the Empire State Building was completed in 1931.
But experts say the Council could struggle to recoup the $800 million it paid for its stake in the building back in 2008, just before the bottom fell out of the US economy, according to the Wall Street Journal.
The biggest problem facing the Chrysler building is the opening of dozens of sleek contemporary high-rises across the city that were designed with current tastes in mind. These buildings benefit from amenities like terraces, bike rooms, gyms and other features popular with modern workers.
Another deterrent is the immense upkeep costs associated with maintaining buildings from the pre-War era. All of these reasons make buying the building impractical for land lords hoping to make money off renting office space (the rising cost of leasing the land underneath the building is also a factor). Meaning that any buyer would likely be more interested in owning the building for the bragging rights.
"There might be a billionaire who comes along and says, 'I want to tell the world I own the Chrysler Building,'" said Adelaide Polsinelli, vice chair of the commercial investment sales and leasing division at real-estate services firm Compass.
But, she added, there are downsides to owning a prewar building. "When things break, it takes much longer to fix because there’s only one guy on the planet that has the tools to fix something from the 1920s and 1940s," she said.
Still, with anxieties about possible volatility in stocks making some wealth investors wary, the Chrysler could benefit from the fact that New York City real-estate is considered a relatively "safe" asset.
Sale prices took a hit in 2017, when Chinese investors pulled back. But activity began to pick up again last year. Stock market turmoil could lead some investors to seek the security of bricks-and-mortar in big cities, said Jim Costello, a senior vice president with Real Capital Analytics.
"In Manhattan you know what you’re getting, and there’s a certain amount of safety," he said.