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New York's iconic Chrysler Building up for sale

Move comes at a tough time for Manhattan real estate market, where prices of older buildings are falling

The land on which the Chrysler Building stands is one-third owned by Cooper Union, a private university.

New York

THE Chrysler Building, one of the most iconic structures in New York, has been put up for sale by its owners, Emirati investment firm Mubadala and real estate group Tishman Speyer.

The owners did not set a selling price, a source close to the sale said on condition of anonymity, confirming a report that was first published in The Wall Street Journal.

"It's exciting. I'm getting inquiries from all over the world," said Darcy Stacom, chairman and head of New York City Capital Markets at brokerage CBRE Group.

The 77-storey stainless steel-clad skyscraper in midtown Manhattan, an Art Deco masterpiece that has been a defining image of New York City's skyline for decades, was acquired in 2008 by Mubadala, which paid US$800 million for a 90 per cent stake.

Tishman Speyer, which had bought the building outright for a reported US$210 million to US$250 million back in 1997, retained a 10 per cent stake. Neither firm would offer a comment when contacted.

Tishman Speyer has hired real estate group CBRE to manage the sale of the building at the intersection of 42nd Street and Lexington Avenue.

The announcement comes at a difficult time for the New York real estate market, especially in Manhattan.

Development of the Hudson Yards neighbourhood, on Manhattan's West Side, will soon be complete, with more than 1.6 million square metres of new office and residential space. That has driven prices down even further for older buildings.

Another factor for potential buyers to consider: the land on which the Chrysler Building stands is one-third owned by Cooper Union, a private university.

In 1997, Tishman Speyer negotiated a long-term lease with the university that ran through 2147. That deal called for the annual rent to rise from US$7.8 million in 2017 to US$32.5 million from 2019-2027, according to documents seen by AFP.

The value of the land alone was estimated at US$679 million in late-2017.

The Chrysler Building, which opened in 1930, stands at 319 metres tall. It was the world's tallest building, but only for 11 months, when it was dethroned by the Empire State Building, also in Manhattan.

The building was a personal project for Walter Chrysler, the founder of the car manufacturer that bears his name, but remained separate from the auto business.

Buildings on average are 50 years old in Midtown and many store-fronts are empty, hard hit by e-commerce.

With the new Hudson Yards district on the far West Side attracting major corporations, concerns have been raised about Midtown's appeal.

But Midtown remains a favoured business destination. JPMorgan Chase & Co plans to build a new headquarters on nearby Park Avenue. One Vanderbilt, a marquee office tower, is rising just west of Grand Central.

Age could be a selling point, too, as seen by the popularity of Midtown South, which has the city's lowest vacancy rate and companies such as Alphabet's Google and Facebook occupy century-old structures.

The decision to sell a property is driven by numerous factors, not often due to unsatisfactory performance, said Patrice Derrington, director of the real estate development programme at Columbia University.

"New York City constantly offers an appropriately varied array of formats for office tenants, creating a complementary ecosystem," she said. AFP, REUTERS