Tishman Speyer Signs Chrysler Ground Lease, Commits $235M

On a ground lease, the term and rent resets, not the tower, set the value.

A year of ownership uncertainty ends with a ground lease, and the capital plan is $235M for a boutique office repositioning.

Tishman Speyer has signed a ground lease on the Chrysler Building, ending more than a year of uncertainty about its future (CRE Daily, Oct. 16).

This is an update to the Oct. 8 coverage of the Chrysler Building. The new material facts are the signed lease and the $235M commitment.

The $235M works out to about $181 per SF across 1.3M SF (derived). That is a repositioning figure, not an acquisition price, because no price was reported.

The owner remains Cooper Union, which holds the land.

The planned product is a boutique office building, per the source. Renovation timeline and leasing strategy were not announced.

Implications: a ground lease lets the buyer avoid a land purchase, but the lease term, rent resets and leasehold financing terms decide the value, and none are public. Lenders to a leasehold need the term to run well beyond the loan. Watch for the term and any rent reset schedule.