[NYguy]

I'm excited about the coming deck and other improvements. A little more on that...



https://www.bloomberg.com/news/featu...ding-the-alarm

Developer Aby Rosen would really like this whole work-from-home thing to be temporary. And by the way you should see what he’s done with the Chrysler Building.


By Devin Leonard
December 18, 2020

The 61st-floor terrace of the Chrysler Building, the Jazz Age wonder of the New York skyline, is studded with massive steel eagles. On a misty October night, Aby Rosen, the German-born investor who’s redeveloping the building, leans against a railing beside one of the birds. It’s beginning to drizzle, but Rosen, who has long white hair and alert blue eyes, is in an ebullient mood.

He points out the other landmarks near his own landmarked building, which his company, RFR Holding LLC, purchased last year with Signa Group, an Austrian real estate investor, for $151 million. There’s the statue of Mercury in his winged helmet welcoming travelers to Grand Central Terminal, the Beaux Arts gateway to the city for commuters from the northern suburbs. Rosen gestures to the jagged summit of One Vanderbilt, the neighborhood’s latest skyscraper, to be joined in a few years by JPMorgan Chase & Co.’s princely new headquarters, under construction nearby on Park Avenue.

To the west, Rosen can see the shimmering towers of Hudson Yards, New York’s newest commercial district. Many tenants, including some of his, have been drawn there, but they can have it as far as he’s concerned. “It’s quite stunning,” Rosen says. “It’s like a city unto itself. But Midtown, for me, has always been the most exciting part.”

He says there will be no better Midtown address than the Chrysler Building, once he and his partners complete a renovation that will cost at least $200 million. He steps through the window back into the 61st floor. It’s been entirely gutted. Rosen is transforming the space into a cocktail bar and restaurant, taking its name from the Cloud Club, the celestial hangout that once operated in the building’s spire, attracting the likes of John D. Rockefeller and Jack Dempsey.

Rosen is converting the 27th floor into what he refers to as a club where tenants can shoot pool, do yoga, meditate. In the lobby he’ll be displaying futuristic cars developed by Fiat Chrysler Automobiles NV. On the ground floor, tourists will nosh on burgers at the Chrysler Deli and have their photos taken riding a replica of one of the building’s birds of prey against a facsimile of the city’s skyline.

Beneath the building, in the concourse leading to Grand Central, RFR and Signa bought out the usual unglamorous spots where office toilers got a shoeshine and had their glasses repaired, and plan to replace them with more upscale merchants. “We wanted to create something nice—food, wine, dry cleaning, shavers, hairdressers—so tenants have a reason to stay longer instead of running out,” Rosen says, glancing around. “This neighborhood, as you know, is busy as hell.”

Usually, but not now. The concourse is tomblike. The whole building is quiet. During an hourlong tour, Rosen encounters only one tenant, Peter Shaerf, a managing director at the merchant banking firm AMA Capital Partners, who sits alone at his desk on the 67th floor. “Someone’s got to be here in the pandemic,” he says.

Shaerf loves the Chrysler Building. But he tells Rosen that after 16 years, AMA is leaving. “You’re charging us too much money,” he says. “We can’t afford to stay.”

“Hey, if you leave, trust me, the line to take this space will be pretty long,” Rosen parries.

“I hope so,” Shaerf says.

“Don’t leave,” Rosen says, heading for the elevator. “Pay the high rent. Come on!”

Then he lowers his voice and says, “See what I have to deal with every day?”

A week later, Shaerf, who lives in Manhattan, says the company decided a while ago to decamp to the suburbs, where four of the senior executives reside, and that the rent had nothing to do with the decision. That was before the pandemic. Shaerf says his partners wouldn’t come back now even if Rosen sliced their Chrysler Building rent in half. They don’t want to get on a train and come into Midtown. It isn’t just the threat of Covid-19. “There’s nothing to draw them in right now,” Shaerf says. “There’s no nightlife. And there’s no day life.”

Such a climate is obviously a challenge for Rosen at the Chrysler Building, but his turnaround plan was complicated even before the pandemic. RFR and the Signa Group were able to acquire the building for a mere $151 million because its previous controlling owner, the Abu Dhabi Investment Council, had paid an overly generous $800 million for 90% of it in 2008 and was eager to get out. “They lost their shirts,” Rosen says.

Now he and his partners have to be careful they don’t wind up shirtless, too. He concedes that the Chrysler Building is operating in the red. The reason: Although RFR and Signa control the building, they have to pay $32 million a year in rent to the owner of the ground beneath it. That’s the Cooper Union for the Advancement of Science & Art, a downtown school created in 1859 to provide free college education to the working class. The ground rent leaps to $41 million in 2028. Rosen says he’s hoping to persuade the school to restructure the arrangement. A spokeswoman for Cooper Union, however, says it’s counting on the money to fund a plan to bring back full-tuition scholarships for undergraduates. The school hasn’t offered them to most new students since 2014.

“Aby is one of the most creative people I’ve met,” says his friend and fellow property mogul Tony Malkin, CEO of Empire State Realty Trust. He says the ground rent is Rosen’s biggest obstacle. Malkin knows something about older skyscrapers: His company owns the Empire State Building.

He says Empire State Realty Trust spent more than $400 million overhauling the Empire State Building so the company could raise rents and increase profitability. But it owns the land beneath the building. What’s Malkin’s advice for Rosen? “I have no comment,” he says.